A Train Company Is Considering Applying Yield Management Principles to Its

question 118

Essay

A train company is considering applying yield management principles to its ticket sales. Suppose that there is no variable cost in the operation, only a fixed cost to run each train. The company decides that a student ticket will sell for half the cost of a business ticket. If demand for the business tickets is given by 50-3x where x is the sales price of a business ticket and demand for student tickets is given by 70-y^2 where y is the price of a student ticket how much should the company charge for tickets to maximize revenue?

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Definitions:

Objective Evidence

Data, records, or facts that are observable and measurable, independent of personal feelings, assumptions, or interpretation.

Persuasive Messages

Written or verbal communication intended to influence the attitudes, beliefs, or actions of others through logical or emotional appeals.

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, often used in marketing.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, driven by the desire to fulfill a need or achieve a goal.