Use the Information Below to Answer the Following Question(s)

question 19

Multiple Choice

Use the information below to answer the following question(s) . Below is a decision tree for the airline revenue management. Create a one-way table and answer the following questions.
-If the probability of selling the full-fare ticket is 0.80, what is the expected value of the ticket?

• A) $ 442.50
• B) $ 472.00
• C) $ 501.50
• D) $ 531.00

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, usually intended to protect consumers from high prices.

Market Equilibrium

A state in a market where the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to a stable price.

Binding Constraint

A restriction or limitation that significantly impacts decision-making or the feasibility of certain actions within an economic model or real-world scenario.

Binding Price Ceiling

A government-imposed limit on the price of a good or service that is set below the market equilibrium price, leading to shortages.