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Mount Snow operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming s season vestors would like o
Mount Snow operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming s season vestors would like o earn a 15% re m on investment on the company's $165.000.000 o assets. The company primar y incurs fixed costs to groom the runs and operate the lifts. Mount Snow projects foed costs to be $36,000,000or the ski season. The resort serves about 750,000 skers and snowboarders each season Variable costs are about $10 per guest. Curently, the resort has such a favoablerputation among skiers and snowboarders that it has some control over the lift ticket prices Read the reouirements Requirement 1. Would Mount Snow emphasize target pricing or cost-plus pricing? Why? Mount Snow should emphasize a others in th its good reputation, managers wii h approach to pricing because it has been able to differentiate its sk resort from others in the area Because of its good reputation, managers wll have control over pricing Of course they still need to consider wnemer meance e within e ange customers are wiling to pay V price s within the range customers are willing to pay Requirement 2. If other resorts in the area charge $88 per day, what price should Mount Snow charge? Complete the following table to calculate the price Mount Snow should charge per lift ticket Plus: Plus Divided by Price per lift ticket
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