# solution

Each Tuesday, Ryan Airlines reduces its one-way ticket from Fort Wayne to Chicago from \$125 to \$40. To receive this special \$40 price, the customer must buy a round-trip ticket. Ryan has a nonrefundable 25% penalty fare for cancellation; it estimates that about nine-tenths of 1% will cancel their reservations. The airline also estimates this special price will cause a passenger traffic increase from 400 to 900. Ryan expects revenue for the year to be 55.4% higher than the previous year. Last year, Ryanâ€™s sales were \$482,000. To receive the special rate, Janice Miller bought two round-trip tickets. On other airlines, Janice has paid \$100 round trip (with no cancellation penalty). Calculate the following:

a. Percent discount Ryan is offering.

b. Percent passenger travel will increase.

c. Sales for new year.

d. Janiceâ€™s loss if she cancels one round-trip flight.

e. Approximately how many more cancellations can Ryan Airlines expect (after Janiceâ€™s cancellation)?

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