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Solved! Get answer or ask a different Question 215

2. (10 points) A flight has 61 seats left. The full-fare tickets are priced at $800 and the discount tickets are priced at $300. The airline estimates that the demand from full fare customers is uniform between 31 and 80.

a. (5 points) To maximize the expected revenue, should the airline sell one more discount ticket?

(What I had so far)

Cu = p-w

Co = w-0+h

P(D? Q)= Cu/(Cu+Co) = (p-w)/(p-w+w+h)

P(D? Q)= (p-w)/(p+h)

Service level = (800-300)/(500+300) = .625

b. (5 points) How many seats should we reserve for the full fare class?

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