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Mount Snow operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to
Mount Snow operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to eam a 14% return on investment on the company's $183,750,000 of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. Mount Snow projects fixed costs to be $33,000,000 for the ski season. The resort serves about 725,000 skiers and snowboarders each season. Variable costs are about $8 per guest. Currently the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices. Read the requirements Requirement 1. Would Mount Snow emphasize target pricing or cost-plus pricing? Why? Mount Snow should emphasize a approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its good | price is within the range customers are willing reputation, managers will have to pay
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