Asked by Junaid Ur Rehman on Sep 24, 2024
Verified
Advance-purchase discounts offered by airlines are an example of
A) Direct price discrimination
B) Indirect price discrimination
C) All of the above
D) None of the above
Advance-Purchase Discounts
Reductions in price offered to customers who pay for goods or services before they are received or required.
Indirect Price Discrimination
A pricing strategy where different prices are charged for the same product or service in different markets or segments, not directly based on consumer characteristics.
- Distinguish between direct and indirect forms of price discrimination.
Verified Answer
FG
Flavio Gonzalez2 days ago
Final Answer :
B
Explanation :
This is an example of indirect price discrimination, as it is a discount offered based on the timing of the purchase rather than any individual characteristics of the consumer. This allows airlines to charge higher prices to consumers who need to purchase tickets closer to the date of travel, while still filling seats and maximizing revenue.
Learning Objectives
- Distinguish between direct and indirect forms of price discrimination.
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