Reference no: EM13190289

1.A New Hampshire resort offers year-round activities: in winter, skiing and other cold-weather activities; and in summer, golf, tennis, and hiking. The resort's operating costs are essentially the same in winter and summer. Management charges higher nightly rates in the winter, when its average occupancy rate is 75 percent, than in the summer, when its occupancy rate is 85 percent. Can this policy be consistent with profit maximization? Explain.

2.A golf course operator must decide what green fee (prices) toset on rounds of golf. Daily demand during the week isPD =36 - Q D / 10 where QD is the number of 18hole rounds and PD is price per round. Daily demand on the weekendis PW=50-QW/12. As a practical matter the capacity of thecourse is 240 rounds per day. Wear and tear on the course is negligible.

a.) Can the operator profit by charging different price rates during the week and on the weekend?Explain. What green fees should the operator set on weekdays andhow many rounds will be played? On the weekend?

b.) When wekend prices skyrocket, some weekend golfers choose to play during the week instead. The greater difference between the weekday and the weekend prices, thegreater are the number of "defectors." How might this factor affect the operator's pricing policy?