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    profit maximization and occupancy

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    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 winter, when its average occupancy rate is 75%, than in the summer, when its occupancy rate is 85%. Can this policy be consistent with profit maximization? Explain.

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    Solution Preview

    It seems at first that it makes more sense to raise prices when occupancy rates are high. But, there are actually two different groups being served by this resort. The resort has probably ...

    Solution Summary

    Policies involving profit maximization as it applies to a seasonal resort