The new college students hired at Steamboat have studied some economics and have noticed an interesting trend among the skiers: there's a group of skiers that show up bright and early before the lifts open so that they can beat the crowds (group B); then there are the rest of skiers who show up at a leisurely pace over the course of the rest of the morning (group A).

The students are wondering if it would be more profitable to raise the price of lift passes to give everyone early access, keep selling regular lift tickets, or to offer both (early skiing and regular skiing lift tickets). It is more expensive to open the lift earlier (costs $56 per ticket to operate early access, and just $5 to operate regularly) because they have to pay staff to come in earlier, pay for the operating costs of running the lifts for longer, etc.

They've surveyed the skiers' interest (WTP) for early and regular lift tickets. That information and the cost information is summarized in the table below:

		Early access lift tickets	Regular lift tickets	# of people in group
	Group A	$140	$125	500
	Group B	$175	$125	300
	Cost	$56	$5

1. Should Steamboat introduce early access lift tickets?

a.Yes, they should sell only early access lift tickets

b. Yes, but they should segment and offer both early access and regular lift tickets

c. No, they should continue to sell regular lift tickets only

2. Steamboat was able to figure out significant cost efficiencies to bring down their costs for both regular (now costs $3 per ticket) and early access skiing (now costs $20 per ticket). Do the lower costs change your recommendation for whether or not Steamboat should sell early access tickets?

a.Yes

b. No