Charging Different Prices at Different Times to Reduce Capacity Constraints

question 106

Multiple Choice

Charging different prices at different times to reduce capacity constraints is called:

• A) Transfer pricing
• B) Peak load pricing
• C) Penetration pricing
• D) Price skimming

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate.

Common Stock

A type of security representing ownership in a corporation, with holders having a claim on part of the company’s assets and earnings.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Profits

Profits represent the financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain the operation.