Hidden Valley is considering the option of offering season passes. Season passes would cost $400 and allow holders to use the ski lift any day during the entire year if Hidden Valley is open. Hidden Valley estimates that a typical season pass holder would use the ski lift on 9 of the 90 days on which they are open (i.e., 10% of the days).
All season passes will be sold before the start of the season. In order to control costs, Hidden Valley will reduce the number of daily lift tickets sold by one-tenth of the number of season passes sold. For example, if 100 season passes are sold, Hidden Valley will only allow 990 daily passes to be sold on each day that they are open. Note that this ensures that the average number of customers on a given day will remain at no more than 1,000, as it is under the current policy.
Assuming that Hidden Valley was able to completely shift over to selling season passes (and so they sold no daily lift tickets) and that they sold as many season tickets as possible without breaking the 1000 customer per average day, how much profit would they earn in a year?