Question: Due to the same late cancellations problem, you decide to reduce the price of your rooms to $150 and request customers to pay a non-refundable

Due to the same late cancellations problem, you decide to reduce the price of your rooms to $150 and request customers to pay a non-refundable fee of $50 at the moment of booking (as a result, customers that show-up only pay $100 on sight). Despite these changes, you estimate that the distribution of late cancelations will be the same as before.

How many overbookings should you accept?

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