Question: Problem 1 (1 pts) An airline has two fare classes and protects 40 seats for the higher fare class. Assume that total capacity is 100

Problem 1 (1 pts) An airline has two fare classes

Problem 1 (1 pts) An airline has two fare classes and protects 40 seats for the higher fare class. Assume that total capacity is 100 seats. The demand for the higher fare class ranges from 30 to 70 and it is uniformly distributed. If the discount ticket costs $300, how much should the full fare ticket cost to make the protection level of 40 optimal? Hint: Use the formula palpf = P(df > y) = 1 -(y - a)/(b - a) for the uniformly distributed demand over [a, b]

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