Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from history that an average of 25 customers (with a standard deviation of 15) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $125. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $250. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost.

By how many seats should Super Discount overbook the flight? (round to the nearest whole number)

Question 4 options:

15


19


21


17