Question

snowpeak ski resort offers a price for a lift ticket that is barely over its marginal cost, but the high equipment rental fee keeps generating big profits. which pricing strategy is the management using?

Answer 1

Based on the fact that Snowpeak Ski Resort offers prices for lifts that are barely over their marginal cost but still make profits from high equipment rental, the pricing strategy in use is Cross-subsidization.

What is Cross-subsidization?

This is a pricing strategy that allows a company to charge one group of customers a higher amount for goods sold or services rendered while charging another group of customers a lower amount for other goods and services.

The logic is that the profits from the higher priced goods will take care of the marginal profits from the smaller cost goods and services.

Companies do this because they know that there are services that they can offer that will be easier to sell to people at a higher cost than a lower one. This is what Snowpeak Ski Resort is doing by using the rental fee of equipment to make profits.

Find out more on Cross-subsidization at brainly.com/question/6886629

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