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I run Delta airlines, and I'm trying to decide whether I should sell 51 (scenario A) or 50 tickets (scenario B) Each ticket sells for
I run Delta airlines, and I'm trying to decide whether I should sell 51 (scenario A) or 50 tickets (scenario B) Each ticket sells for $500 for my 50 seat plane. If I sell 51 tickets and all 51 people show up (which happens with probability 16%), then I have to pay the 51st customer $1000 (which includes her refund). What is the expected value of selling 51 tickets MINUS the expected value of selling 50 tickets?
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