An air traveler from Istanbul to Ankara have two options on Turkish Airlines: a 190 TL fare with a 50% cancellation penalty, and a 250 TL fare with a 10% penalty. Assume that the probability of traveler canceling the trip is p. • What is the probability distribution for the amount of money Turkish airline is going to earn for the 190 TL option? What is the same distribution for the 250 TL option? (Answer in terms of p). • What is the expected amount of money Turkish Airlines is going to earn under two options? • For what values of p does the 250 TL option yield lower expected price? What does this outcome suggest about the preferable option for a typical traveler?
Quadratic Equation
When it comes to the concept of polynomial equations, quadratic equations can be said to be a special case. What does solving a quadratic equation mean? We will understand the quadratics and their types once we are familiar with the polynomial equations and their types.
Demand and Supply Function
The concept of demand and supply is important for various factors. One of them is studying and evaluating the condition of an economy within a given period of time. The analysis or evaluation of the demand side factors are important for the suppliers to understand the consumer behavior. The evaluation of supply side factors is important for the consumers in order to understand that what kind of combination of goods or what kind of goods and services he or she should consume in order to maximize his utility and minimize the cost. Therefore, in microeconomics both of these concepts are extremely important in order to have an idea that what exactly is going on in the economy.
An air traveler from Istanbul to Ankara have two options on Turkish Airlines: a 190 TL fare with a
50% cancellation penalty, and a 250 TL fare with a 10% penalty. Assume that the probability of traveler
canceling the trip is p.
• What is the probability distribution for the amount of money Turkish airline is going to earn for the
190 TL option? What is the same distribution for the 250 TL option? (Answer in terms of p).
• What is the expected amount of money Turkish Airlines is going to earn under two options?
• For what values of p does the 250 TL option yield lower expected price? What does this outcome
suggest about the preferable option for a typical traveler?
Step by step
Solved in 2 steps with 1 images
