Question
For this part, assume that the airline charges a single price to all customers. Using the demand function for total demand determined in part a,
For this part, assume that the airline charges a single price to all customers. Using the demand function for total demand determined in part a, formulate and solve a nonlinear programming model in a spreadsheet to determine what the price should be so as to achieve the highest profit for the airline.
The decision to be made is how much to charge for the tickets. Therefore, define a changing cell TicketPrice (C12). Based on part a, the demand for tickets is Demand = a * (TicketPrice)b = 3,287,816 * TicketPrice-1.62. The goal is to maximize profit. The profit is based on the ticket price, variable cost, demand, and fixed cost as follows:
Profit = (TicketPrice - VariableCost) * Demand - Fixed Cost.
answer would be 54,501.05
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Accounting
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
9th edition
1118608224, 1118608227, 730323994, 9780730323990, 730319172, 9780730319177, 978-1118608227
