A new airline has decided to join the market. It is considering offering flights out of Cagayan, and would initially like to travel to three different locations: Cebu, Palawan, and Bohol. The distances of each round-trip flight going out of Cagayan are (approximately): 720 miles, 1500 miles, and 1140 miles, respectively The company would like to use the slogan, "the average price per flight is nevermore than P10, 000." As for costs, it anticipates flights to Cebu will run about 10%ofairfare. Similarly, Palawan will run 12% and Bohol will run 14% of airfare. The company wants to ensure that the overall average cost is no more than 10%of earned airfare. Recent market research allows the company to conclude that it could probably sell about 1900 Cebu tickets, 700 Palawan tickets, and 1000 Bohol tickets. Under these conditions and assuming that all tickets sold are round-trip flights, how much should the company charge per ticket in order to maximize its total revenue?

REQUIREMENTS:

a. Define the decision variables

b. Formulate a linear programming model for this problem.

c. Solve using the simplex method.