   # 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? 13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884

#### Solutions

Chapter
Section 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. ### Explanation of Solution 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,

P(x550)

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.

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