A theater with 1,100 seats typically fills 55% of the seats with a fixed price strategy of $50/seat. Profits have been declining in recent years as facility costs like heat, lights and taxes have gone up. Management is evaluating various means of reversing the decline, including the use of a yield management pricing program. Testing has provided the following results for a three price yield management system:
125 seats sold at $65
325 seats sold at $45
375 seats sold at $35
Find the difference in the fixed price and three price yield management revenue. Should the theater adopt the three price yield management program? Explain