In its attempt to get people who have never skied before to try out the sport, Ski Butternut prices a first-time

package of a ski lesson, a lift ticket, and a rental at $75, much lower than the $135 price of the three individual components. The company aims to gain more customers using this strategy. This strategy is known as _____.

a.loss-leader pricing

b.odd pricing

c.prestige pricing

d.skimming pricing

Which of the following is the objective of Ski Butternut’s pricing strategies?

a.Market suppression

b.Meeting competition objectives

c.Volume objectives

d.Target-return objectives

Ski Butternut’s season pass is priced at $275—a five-visit breakeven point. What does this imply?

a.The business needs customers to visit at least five times in order to earn revenue for the visits.

b.The business will not make a profit unless passholders visit the mountain more than five times.

c.The customers will cover the cost of the pass after five visits to the mountain.

d.The customers have to visit the mountain a minimum of five times in order to become a passholder.

Ski Butternut charges customers a small premium on holidays, when demand is high, in order to preserve the experience for customers. This is an example of _____.

a.a target-return objective

b.yield management

c.pure competition

d.cost-plus pricing

Ski Butternut found that reducing the price of a lift ticket by $20 increased demand among college students. Which of the following can be inferred in this case?

a.The company uses incremental-cost pricing.

b.The demand for ski packages is inelastic.

c.The company uses a cost-plus pricing strategy.

d.The demand for ski packages is likely to be elastic.

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