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Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737 , with all-coach seating for 120 people. In the past, the airline has
Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737 , with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 81 passengers are on each flight. The variable cost of a filled seat is $23. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $81 for early bookings and at $194 for bookings within 1 week of the flight. He estimates that the airline will sell 66 seats at the lower price and 37 at the higher price. Variable cost will not change. Total $ contribution in the single price approach is $ (enter your response as a whole number). Total \$ contribution in the two price points approach is $ (enter your response as a whole number). Which approach is preferable to Mr. Eziz? Current model - single price Proposed model - two price points
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