Scenario 15-5 An Airline Knows That There Are Two Types of Travelers

question 330

Multiple Choice

Scenario 15-5
An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc.
-Refer to Scenario 15-5. How much additional profit can the airline earn by charging each customer their willingness to pay relative to charging a flat price of $300 per ticket?

• A)$10,000
• B)$15,000
• C)$30,000
• D)$45,000

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Definitions:

Uniform Density

A type of distribution in which all outcomes are equally likely within a specified range, characterized by a constant probability density function.

Probability

A measure of the likelihood that a particular event will occur, expressed as a number between 0 and 1.

Poisson Approximation

A statistical method used to approximate the probabilities of rare events in a fixed interval of time or space, assuming events occur with a known constant rate independently of the time since the last event.

Probability

A value between 0 and 1 determining how likely an event is to occur, representing its probability.