Question: Consider a single-fare capacity allocation problem. The capacity of the airplane is 100 seats. The high fare is $100 and the low fare is $50.

Consider a single-fare capacity allocation problem. The capacity of the airplane is 100 seats. The high fare is $100 and the low fare is $50. The demand for the high fare seats is expected to arrive closer to the day of the flight, and has a Normal distribution with mean 50 and standard deviation 25. What is the optimal protection level for the high fare customers to maximize the expected revenue?

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