The mean cost of domestic alrfares in the United States rose to an all-time high

Question

The mean cost of domestic alrfares in the United States rose to an all-time high of $380 per ticket. 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 $100. Use Table 1 in Appendix B, a. What is the probability that a domestic airfare is $545 or more (to 4 decimals)? b. What is the probablility that a domestic airfare Is $245 or less (to 4 declmals)? c. What If the probabllity that a domestlc alrfare is between $320 and $480 (to 4 declmals)? d. What is the cost for the 39 highest domestic airfares? (rounded to nearest dollar) r l Select your answer

Explanation / Answer

a) P(X > 545)

= P(z > (545 - 380)/100)

= P(z > 1.65)

= 0.9505

b) P(X < 245)

= P(z < (245 - 380)/100)

= P(z < -1.35)

= 0.0885

c) P(320 < X < 480)

= P(-0.6 < X < 1)

= 0.5671

d) For top 3% airfares, z = 1.88

Hence,

Cost = 380 + 1.88*100 = $ 568

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