Winter Run 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 $$270,000,000$ of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. Winter Run projects fixed costs to be $$31,000,000$ for the ski season. The resort serves about $725,000$ skiers and snowboarders each season. Variable costs are about $$7$ per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices.

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Requirement $1.$ Would Winter Run emphasize target pricing or cost$-$plus pricing? Why?

Winter Run should emphasize a $$ good reputation, managers will have are willing to pay. approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its control over pricing. Of course, they still need to consider whether the price is within the range customers