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.
Q1. How would the airline maximize the total revenue it obtains from the two flights.
Q2. 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
Q3. Suppose the airline is conserving promoting a single "value fare" to all passengers on this route. Find the optimal single fare using spreadsheet optimizer.