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The Regular Air Fare Between Boston and San Francisco Is

Question 72

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The regular air fare between Boston and San Francisco is $600.An airline flying 747s with a capacity of 480 on this route observes that they fly with an average of 400 passengers.Market research tells the airlines' managers that each $20 fare reduction would attract, on average, 20 more passengers for each flight.How should they set the fare to maximize their revenue?

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