Question: 14. Problem 14 in Chapter 1 posed the following situation: The demand for airline travel is quite sensitive to price. Typically, there is an inverse
14. Problem 14 in Chapter 1 posed the following situation: The demand for airline travel is quite sensitive to price. Typically, there is an inverse relationship between demand and price; when price decreases, demand increases, and vice versa.
One major airline has found that when the price (p) for a round trip between Chicago and Los Angeles is $600, the demand (D) is 500 passengers per day.
When the price is reduced to $300, demand is 1,200 passengers per day. You were asked to develop an appropriate model. Implement your model on a spreadsheet and use a data table to estimate the price that maximizes total revenue.
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