Economics Price Discrimination Questions
Peak-load pricing is a strategy used in price discrimination where businesses charge higher prices during periods of high demand or peak times, and lower prices during periods of low demand or off-peak times. This allows businesses to maximize their profits by capturing the willingness of consumers to pay higher prices during peak times while still attracting customers during off-peak times with lower prices. The goal of peak-load pricing is to balance supply and demand by incentivizing consumers to shift their consumption to off-peak times, thereby reducing congestion and maximizing the utilization of resources.