Airbus
Boeing
Demand
P = 182.868 - 0.0003Q
P = 198.6592 - 0.00013Q
TVC Curve
TVC = 104.8822Q - 0.001Q^2 + 0.09Q^3
TVC = 25.8678Q - 0.00023Q^2 + 0.4Q^3
^{ }
In addition, the joint group analysis determined the market would bear a price per plane somewhere within the following parameters:
Table 1
Price per plane (million $)
Probability
125
.25
175
225
.5
First estimate the price per plane using the estimated prices and probabilities given in Table 1.
Part 2:
Price per plane
(million $) Probability
-------------------------------------------
125 .25
175 .25
225 .50
The estimated price per plane is given as a weighted average of all possible prices, where the weights are given by the respective probabilities of each price
So expected price per plane = (125*0.25)+(175*0.25)+(225*0.5) = $187.5 million