ZuoTi.Pro
Question

An airline has requests for standby flights at half of the usual oneway air fare. Past...

An airline has requests for standby flights at half of the usual oneway air fare. Past experience has shown that these passengers have about a 1 in 5 chance of getting on the standby flight. When they fail to get on a flight as a standby, the only other choice is to fly first class on the next flight out. Suppose that the usual one way air fare to a certain city is $100 and the cost of flying first class is $395. Should a passenger who wishes to fly to this city opt to fly as a standby? [Hint Find the expected cost of the trip for a person flying standby.]

math   Statistics-And-Probability   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Usual one way air fare =$100. So, Standby air fare =0.5(100) =$50

Expected cost =1/5($50) + 4/5($395) =$10 + $316 =$326

No. A passenger who wishes to fly to this city should not opt to fly as a standby because the expected cost of $326 is greater than the usual one way air fare of $100.

0 0
Add a comment
Know the answer?
Add Answer to:
An airline has requests for standby flights at half of the usual oneway air fare. Past...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A regional airline is the only carrier on a local air route and must determine the...

    A regional airline is the only carrier on a local air route and must determine the number of flights it will provide per week, and the fare it will charge. The estimated cost - fuel, airport charges, pilots, etc. - per flight is $2,000, and each flight is expected to be full, with 100 passengers. Thus the marginal cost per passenger may be considered to be $20.The estimated demand curve is P = 120 − 0.1Q, where P is the...

  • Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service,...

    Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service, using small jets. The airline connects four major cities: Charlotte, Pittsburgh, Detroit, and San Francisco. The company expects to fly 170,000 miles during a month. The following costs are budgeted for a month: Fuel $2,120,000 Ground personnel 788,500 Crew salaries 850,000 Depreciation 430,000 Total costs $4,188,500 Blue Star management wishes to assign these costs to individual flights in order to gauge the profitability of...

  • On a popular air route, an airline offers two classes of service: business class (B) and...

    On a popular air route, an airline offers two classes of service: business class (B) and economy class (E). The respective inverse demands are given by PB = 540 - 0.5QB      and     PE = 380 - QE. Because of ticketing regulations, business passengers cannot take advantage of economy’s low fares. Each flight has a capacity of 200 passengers, The cost per full flight is $20,000, so you may assume the marginal cost per passenger is $100. Consider the scenario...

  • On a popular air route, an airline offers two classes of service: business class (B) and...

    On a popular air route, an airline offers two classes of service: business class (B) and economy class (E). The respective inverse demands are given by PB = 540 - 0.5QB      and     PE = 380 - QE. Because of ticketing regulations, business passengers cannot take advantage of economy’s low fares. Each flight has a capacity of 200 passengers, The cost per full flight is $20,000, so you may assume the marginal cost per passenger is $100. 1. Write down...

  • Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service,...

    Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service, using small jets. The airline connects four major cities: Charlotte, Pittsburgh, Detroit, and San Francisco. The company expects to fly 170,000 miles during a month. The following costs are budgeted for a month: Fuel $2,120,000 Ground personnel 788,500 Crew salaries 850,000 Depreciation 430,000 Total costs $4,188,500 Blue Star management wishes to assign these costs to individual flights in order to gauge the profitability of...

  • 1) If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total...

    1) If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passenger flights. (1) How much would net income be impacted by this change? Net income $ ______ Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city...

  • Sunland Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic...

    Sunland Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Sunland’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs     Fuel $13,390     Snacks and drinks 790     Landing fees...

  • Exercise 6-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for...

    Exercise 6-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. $48,000 $ 16,780 710 2,000 1,150 Fare revenues (400 passenger flights)...

  • Exercise 6-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for...

    Exercise 6-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below a recent month's activity in the form of a cost-volume-profit income statement. $48,000 $ 16,780 710 2,000 1,150 Fare revenues (400 passenger flights) Variable...

  • Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic...

    Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs     Fuel $17,210     Snacks and drinks 760     Landing fees...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT