Asked by Chasity Kleinsorge on Jul 07, 2024
Verified
A local restaurant offers "early bird" price discounts for dinners ordered from 4:30 to 6:30 PM. This is an example of:
A) peak-load pricing.
B) second-degree price discrimination.
C) a two-part tariff.
D) tying.
E) none of the above
Peak-Load Pricing
A pricing strategy used to regulate demand by charging higher prices during peak times and lower prices during off-peak times.
Second-Degree Price Discrimination
A pricing strategy where prices vary based on the quantity of goods or services purchased, but not on the characteristics of the buyer.
Early Bird
A term typically used to describe someone who completes a task or arrives somewhere early, often to take advantage of benefits or discounts.
- Understand the factors influencing profitability and the requirements for implementing peak-load pricing.
Verified Answer
RA
Rosalba AlarconJul 13, 2024
Final Answer :
A
Explanation :
Peak-load pricing involves adjusting prices based on the demand at different times, which is what the restaurant is doing by offering discounts during early dining hours to encourage more customers during what might otherwise be a slower period.
Learning Objectives
- Understand the factors influencing profitability and the requirements for implementing peak-load pricing.