Question

2.38 Baggage fees: An airline charges the following baggage fees: $20 for the first bag and $40 for the second. Suppose 50% of passengers have no checked luggage, 35% have only one piece of checked luggage and 15% have two pieces. We suppose a negligible portion of people check more than two bags.


a) The average baggage-related revenue per passenger is: $  (please round to the nearest cent)
b) The standard deviation of baggage-related revenue is: $  (please round to the nearest cent)
c) About how much revenue should the airline expect for a flight of 150 passengers? $  (please round to the nearest dollar)

Answer 1

number of bags	x ( fees)	P(x)	x*P(x)	x2*P(x)
0	0	0.5	0	0
1	20	0.35	7	140
2	60	0.15	9	540
	sum=	1	16	680
	Mean =sum of (x*P(x))
(a)	Mean = $16	Answer
	variance = 680- (16)2
	variance = 680- 256
	variance = 424
	sd= sqrt(424)
	sd= 20.59
(b)	standard deviation =	$ 20.59	Answer
	Expected  revenue
	for 150 passengers=	150*16
(c )	Expected  revenue
	for 150 passengers=	$ 2400	Answer