Can Airlines Overbook Flights?

There are no laws against either overbooking a flight or selling more seats than exists on a certain plane. The only way to see what demand is in their mind is to put everything on the shelf, put it up for sale, see who buys it and then revisit. Book people even if they might not be able to operate those flights. There are rules about canceling that flight, but you're certainly allowed to oversell your schedule.