A private charter airline has a plane that can accommodate 20 passengers. the airine knows that passengers often do not show up, so it sells extra tickets. the probability that an individual passenger will not show up is 8% independent of all other passengers. each ticket costs $150 and is non-refundable if a passenger fails to show up. if a passenger shows up and a seat is not available the airline has to pay $300 to the passenger (the amount of the ticket price+an additional $150 penalty). if the airline wants its average revenue across flights to be at least $3000,should it sell 22 tickets?

Question

anonymous · Answer

Revenue is defined as the total amount of money received from tickets sales, minus any payment to passengers

kropot72 · Answer

Use the binomial distribution to find the probabilities that (a) 21, and (b) 22 ticket holders will show up. Then multiply these probabilities by $300 and $600 respectively and add these two loss amounts. Subtract the total sum of losses from $150 * 22 = $3300, to find the expected revenue per flight.

perl · Answer

interesting