Determine the price rate-demand , Basic Statistics

Assignment Help:

SkyyMarley Airlines has determined that the price elasticity of demand for two customer segments (Coach and Business Class) is -1.35 and -2.50.  Based on their expectations of profitability, SkyyMarley realizes the price of a Coach seat should be $175 (one way).  How much should SkyyMarley charge for a Business Class ticket?  (

The relation between elasticity, P and MC when profits are maximized is

MC= P(1-1/e) where is the absolute value of elasticity of demand.

For a coach seat

MC= 175( 1-1/1.35 )= 45.37

Assuming MC is same for business class

P= MC/ (1-1/e) = 45.37 /(1-1/2.5) = 75.616-it can charge this price for business class

 


Related Discussions:- Determine the price rate-demand

Co-planer forces, the resultant of two perpandicular forces of magnitude p ...

the resultant of two perpandicular forces of magnitude p each will be

Calculate the mean and the standard deviation, 1.  Create formulas to calcu...

1.  Create formulas to calculate the normalized (i.e., percentage scores) for each of the quizzes and exams.  The yellow fields depict where these interim calculations are required

The correlation coefficient to identify collocations, Would there be a poss...

Would there be a possibility to use the correlation coefficient to identify collocations? Compare with the Chi2 test. • How could we maybe do that?

Characteristics of statistics, Mention the characteristics of Statistics. E...

Mention the characteristics of Statistics. Explain any two applications of Statistics.

Budgeting, What is the basis for factory overhead absorption

What is the basis for factory overhead absorption

Define accounting Actuarial basis , A basis used in processing the quantity...

A basis used in processing the quantity of advantages to be created regularly to a finance or consideration so that the complete advantages plus the complicated income thereon will

Hypothesis testing, The caffeine is expected to lower reaction time by an a...

The caffeine is expected to lower reaction time by an average of 30 msec. Scores on the simulator task for the regular population (without caffeine) form a normal distribution with

T, #how will understand question..moving average method problems for 4year...

#how will understand question..moving average method problems for 4yearly&5yearly also

Capital assets, Capital assets Assets which meet the state''s capitalizati...

Capital assets Assets which meet the state''s capitalization strategy such as ground: developments to l&: easements: buildings: leasehold improvements: means of transportation: or

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd