Question
SnowCastle operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn
SnowCastle 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 10 % return on investment on the? company's $260,900,000of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. SnowCastle projects fixed costs to be $30,000,000for the ski season. The resort serves about 710,000 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.
1. | Would SnowCastle emphasize target pricing or? cost-plus pricing?? Why? |
2. | If other resorts in the area charge $83 per? day, what price should SnowCastle ?charge? |
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