Charging Different Prices During Different Times of the Day or During

question 78

Multiple Choice

Charging different prices during different times of the day or during different days of the week to reflect variations in demand for a service is referred to as

• A)capacity pricing.
• B)idle production pricing.
• C)customer contact pricing.
• D)derived demand pricing.
• E)off-peak pricing.

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Definitions:

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, and vice versa.

Complementary Goods

Products or services that are typically consumed together, where the increase in demand for one leads to an increase in demand for the other.

Substitute Goods

Products or services that can be used in place of each other, where the increase in the price of one leads to an increase in demand for the other.