Determining the expected payout


An airline always overbooks, if possible. A particular planehas 95 seats on a flight in which a ticket sells for $300. Theairline sells 100 tickets.

-If the airline must return the $300 price plus a penalty of $400 to each passenger that cannot get on the flight, what is the expected payout (penalty plus ticket refund) that the airline will pay?

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Basic Statistics: Determining the expected payout
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