Question: ( c ) The airline considers a penalty function in deciding how many passengers to overbook. If more than 5 0 passengers show up ,

(c) The airline considers a penalty function in deciding how many passengers to overbook.
If more than 50 passengers show up, a penalty of $300 per extra passenger is considered
(loss of customer goodwill, bumping passengers to a different flight etc.). If less than 50
passengers show up, a penalty of $250 per empty seat is considered (opportunity cost
etc.). What is the expected value of the penalty function? (20 points)

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