Order to maximize expected revenue

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Reference no: EM13215241

A flight from LA to San Jose has 200 seats. The airline knows that the number of no-shows will vary between 1 and 4, all numbers equally likely. The discount fare price is $200 and the estimated "denied boarding" cost is $500. How many seats should the airline sell for this flight in order to maximize expected revenue?

Reference no: EM13215241

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