Question

A New Hampshire resort offers year-around 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 it occupancy rate is 85 percent. Can this policy be consistent with profit maximization? Explain.