Fun Time Inc

question 417

Multiple Choice

Fun Time Inc. uses the same property and equipment to provide skiing services for six months during the winter and mountain roller boarding for six months during the summer. Monthly revenue and cost figures during the summer and winter months for Fun Time are shown below. Fun Time's $1,000 monthly fixed costs will be incurred as long as it remains in business.
Which of the following should Fun Time do if it wants to maximize its profit?

• A) operate in both the winter and summer
• B) operate in the summer, but shut down during the winner
• C) operate in the winter, but shut down during the summer
• D) go out of business immediately

---

Definitions:

High Switching Costs

High switching costs are barriers that prevent customers from changing products or services, due to financial, emotional, time-related, or effort-based factors.

Complex Backward Integration

A strategy where a company expands its role to fulfill tasks formerly completed by businesses up the supply chain, but with more intricate and multifaceted connections or processes.

Highly Specialized

Highly specialized refers to products, services, or roles that are focused on a narrow aspect, requiring specific knowledge or skills and catering to a particular niche or market segment.

Low Switching Costs

Low switching costs refer to the minimal barriers or expenses that consumers face when changing from one product, service, or provider to another, leading to higher competition among companies.