Expert: Paul Klarreich - 11/25/2005

Question
Suppose that on a certain root, Ethiopian airlines carries 8000 passangers per month, each paying $50. The airlines want to increase the fare. However,the market research department estimates that for each $1 increase in faare, the Airline loss 100 passengers. Determine the price that maxmize the airlines revenu.

Answer
Hi, Dassalegn,

Your Question:  Suppose that on a certain root, Ethiopian airlines carries 8000 passangers per month, each paying $50. The airlines want to increase the fare. However,the
market research department estimates that for each $1 increase in faare, the Airline loss 100 passengers. Determine the price that maxmize the airlines revenue.

WE DID THIS PROBLEM ALREADY.  Didn't you ask me to do this problem:

1-A company determines that it can sell 1000 units of a product per month if the price is 5 birr (DOLLARS?) for each unit. it also estimates that for each one cent reduction in unit price 10 more units can be sold. under these conditions,what is the maximum possible income and what price per unit gives this income?

Just change your 1000 to 8000, your 5 to $50, your one cent reduction (-0.01) to a $1 increase, and your '10 more units' to '100 fewer passengers.'

AND IT'S THE SAME PROBLEM!