Question

6 The airfare between Vienna and Dubai is approximately €500. A particular airline has a passenger capacity of 300, but at certain times of the year they only fly with an average of 180 passengers. After doing some market research, the airline finds out that for each reduction of €10 in ticket price below €500 they can attract two more passengers on each flight. Determine the best ticket price, and the corresponding number of passengers per flight, that would maximize the airline's revenues on this route.​

Answer 1

the best ticket price to maximize the airline's revenue on this route is €460, with 260 passengers per flight.

Here's the explanation:

When the ticket price is €500, the airline only gets 180 passengers, so the revenue is €90,000.
For each €10 reduction in ticket price, the airline can attract 2 more passengers, so the revenue increases by €200.
The revenue reaches its maximum of €122,000 when the ticket price is €460, with 260 passengers.
If the ticket price is reduced any further, the revenue will decrease, because the number of passengers will not increase enough to compensate for the lower ticket price.
Therefore, the best ticket price to maximize the airline's revenue on this route is €460, with 260 passengers per flight.