3.34 baggage fees. an airline charges the following baggage fees: $25 for the first bag and $35 for the second. suppose 54% of passengers have no checked luggage, 34% have one piece of checked luggage and 12% have two pieces. we suppose a negligible portion of people check more than two bags. (a) build a probability model, compute the average revenue per passenger, and compute the corresponding standard deviation. (b) about how much revenue should the airline expect for a flight of 120 passengers? with what standard deviation? note any assumptions you make and if you think they are justified.

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.