A tour operator has a bus that can accommodate 20 tourists. The operator knows that tourists may not show up, so he sells 21 tickets. The probability that an individual tourist will not show up is 0.02, independent of all other tourists. Each ticket costs 50, and is non-refundable if a tourist fails to show up. If a tourist shows up and a seat is not available, the tour operator has to pay 100 (ticket cost + 50 penalty) to the tourist. What is the expected revenue of the tour operator? (A) 935 (B) 950 (C) 967 (D) 976 (E) 985
Added by Stephen S.
Close
Step 1
The information given is that the tour operator has a bus that can accommodate 20 tourists. However, it is not specified how many tickets have been sold. Let's assume that the tour operator has sold 176 tickets. This means that there are 176 tourists who have Show more…
Show all steps
Your feedback will help us improve your experience
Hubert Agamasu and 73 other Intro Stats / AP Statistics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Tour cost A charter bus company has determined that the cost of providing $x$ people a tour is $$C(x)=180+2.50 x$$ A full tour consists of 60 people. The ticket price per person is $\$ 15$ plus $\$ 0.25$ for each unsold ticket. Determine a. the revenue function b. the profit function c. the company's maximum profit d. the number of ticket sales that yields the maximum profit
Functions and Graphs
Quadratic Functions
Sri K.
Recommended Textbooks
Elementary Statistics a Step by Step Approach
The Practice of Statistics for AP
Introductory Statistics
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD