I run Delta airlines, and I'm trying to decide whether I should sell 51 (scenario A) or 50 tickets (scenario B) Each ticket sells for $500 for my 50 seat plane. If I sell 51 tickets and all 51 people show up (which happens with probability 12%), then I have to pay the 51st customer $1000 (which includes her refund). What is the expected value of selling 51 tickets MINUS the expected value of selling 50 tickets? Ignore all costs except for the overbooking penalty.

I run Delta airlines, and I'm trying to decide whether I should sell 51 (scenario A) or 50 tickets (scenario B) Each ticket sells for $500 for my 50 seat plane. If I sell 51 tickets and all 51 people show up (which happens with probability 12%), then I have to pay the 51st customer $1000 (which includes her refund). What is the expected value of selling 51 tickets MINUS the expected value of selling 50 tickets? Ignore all costs except for the overbooking penalty.

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Description: I run Delta airlines, and I'm trying to decide whether I should sell 51 (scenario A) or 50 tickets (scenario B) Each ticket sells for $500 for my 50 seat plane. If I sell 51 tickets and all 51 people show up (which happens with probability 12%), then

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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Concept explainers

Contingency Table

A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.

Binomial Distribution

Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.

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