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

How can do entry, mr.sunil join as a new business partner and borrowed rs. ...

mr.sunil join as a new business partner and borrowed rs. 850000 from ansul investment co. and depoisted the money into a uti bank account on 1-4-2006.

Sale of an asset on account of depreciation, Write a short note on Sale of ...

Write a short note on Sale of An Asset on account of Depreciation. Ans. An asset can be sold anytime before or after its useful life estimated time, in case the asset is sold more

Calculate the average profit, A machine is used for machining of a manufact...

A machine is used for machining of a manufactured product. At the beginning of each business day inspection reveals the machine's condition. There are three possible states: 0, 1 a

Determine the average sales, A company prepares dinners for several airline...

A company prepares dinners for several airlines, and sales average 300,000 meals per month. The significant costs of each dinner prepared are for the meat, veg,plastic trays, and u

Cost inventory, how do I find the cost of inventory?

how do I find the cost of inventory?

Violence in the Media, I need help on writing a paper about this title

I need help on writing a paper about this title

Confidence interval for the mean.., How to start solving the null hypothesi...

How to start solving the null hypothesis that the mean daily caloric intake in the adult population of a rural county is 1800 calories. A sample of 400 had a mean of 1785 and SD 24

Accounting for inflation, Accounting for inflation Inflation sales is a ter...

Accounting for inflation Inflation sales is a term reporting a range of sales systems designed to correct problems that comes from traditional cost sales in the use of inflation. I

Probability, jay can remember only the first 4 digits of his friends phone ...

jay can remember only the first 4 digits of his friends phone number. he also knows that the number has 7 digits and the last digit is not a zero. if jay were to dial all of the po

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