Price vs. Capacity Problem
On an air rout, an ailine offers two classes of service:
busienss (B) and economy (E).
The respective demands are given by:
For B - P= 540-.5Q
For E - P= 380-.25Q
Because of ticketing restrictions business travelers cannot
take advantage of economy's low fare. The airline operates two flights daily.
Each Flight has a capacity of 200 passengers. The cost per flight is $20,000.
a- How would the airline maximize the total revenue it
obtains from the two flights.
b-What fares should the airline charge and how many
passengers will buy tickets of each type? Keeping in mind that max revenue is obtained
by setting MRb=MRe
c-Suppose the airline is conserving promoting a single
"value fare" to all passengers on this route. Find the optimal single
fare using spreadsheet optimizer.