2. Delta Airlines runs a daily flight from Detroit to Paris. The airline faces a fixed cost

of $150,000 for each flight independent of the actual number of passengers on the

plane. There are 300 seats on the plane. One-way tickets generate revenues of $700

apiece. On a typical flight, the airline estimates that the number of no-shows will

have a normal distribution with mean 25 and standard deviation 4.

Delta can overbook but needs to compensate $400 to all ticketed passengers not

allowed to board and must also provide those passengers with alternative

transportation which will cost Delta $700. How many passengers should Delta book

on its flight from Detroit to Paris?