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13th Edition

Anderson

Publisher: CENGAGE L

ISBN: 9781305881884

Chapter 6.2, Problem 17E

Textbook Problem

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The mean cost of domestic airfares in the United States rose to an all-time high of $385 per ticket (Bureau of Transportation Statistics website, November 2, 2012). Airfares were based on the total ticket value, which consisted of the price charged by the airlines plus any additional taxes and fees. Assume domestic airfares are normally distributed with a standard deviation of $110.

- a. What is the probability that a domestic airfare is $550 or more?
- b. What is the probability that a domestic airfare is $250 or less?
- c. What is the probability that a domestic airfare is between $300 and $500?
- d. What is the cost for the 3% highest domestic airfares?

**a.**

To determine

Find the probability that the airfare is greater than or equal to $550.

**Calculation:**

The domestic airfares follow normal distribution. The mean and standard deviation cost of the domestic airfares in the United States are $385 and $110 respectively.

The probability that the airfare is greater than or equal to $550 is,

**Software Procedure:**

Step-by-step procedure to obtain the probability value using the MINITAB software:

- Choose
**Calc**>**Probability Distributions**>**Binomial Distribution**. - Choose
**Cumulative probability**. - Enter Mean as
**385**and Standard deviation as**110**. - In
**Input constant**, enter**550.** - Click
**OK**

Output using the MINITAB software is given below:

**b.**

To determine

Find the probability that the airfare is less than or equal to $250.

**c.**

To determine

Find the probability that the airfare is between $300 and $500.

**d.**

To determine

Find the cost of the highest 3% domestic airfares.

STATISTICS F/BUSINESS+ECONOMICS-TEXT

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