Question

Athens, Georgia is the home of the University of Georgia. Its football​ team, the Georgia​ Bulldogs, is a perennial​ powerhouse, and home games are virtually always sold out. The Graduate Athens is a wonderfully eclectic Athens hotel. Suppose that a weekend stay in a king suite at a similar hotel is​ $639, with a​ two-night stay​ required, when the Bulldogs are playing at home but is only​ $329, with no​ two-night stay​ required, on weekends without home football games.

Is this price difference​ peak-load pricing? Explain your answer.

A.

This price difference is not​ peak-load pricing. The hotel faces its period of peak demand during home football​ games, and it sets the​ off-peak price during this time.

B.

This price difference is​ peak-load pricing. The hotel faces its period of peak demand during home football​ games, and it sets the​ off-peak price during this time.

C.

This price difference is not​ peak-load pricing. The hotel faces its period of peak demand during home football​ games, and it sets the highest price during this time.

D.

This price difference is​ peak-load pricing. The hotel faces its period of peak demand during home football​ games, and it sets the highest price during this time.

Answer 1

SOLUTION:-

Option A is the correct answer

* As the above question reflects the price discrimination based upon peak-load pricing. Whereby, the consumer is charged different prices for the same good/services during different time period due to rise int he demand of the product.

* When the home tam is playing the town, then the hotl is charging $639 for two-night stay during the weekend. But when tere is no such event, then the hotel is charging only $329 i.e. during the off-season.

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