Skiable Acres operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski

season. Investors would like to earn 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. Skiable Acres 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 $$9$ 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 Skiable Acres emphasize target pricing or cost$-$plus pricing? Why?

Skiable Acres 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 reputation, managers will have

control over pricing.

Of course, they still need to consider whether the

price is within the range customers are willing to pay.