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Respond to the question: Is this peakload pricing or 3rd degree?

03/06/2001 06:53 AM by Brandon; 3rd degree price discrimination indeed

Yes, I think I spoofed. The initial view I had was that of 3rd degree price discrimination too but I had mixed feeling when I thought about the size of the fleet (the capital outlay) which the company would have to consider. Is it [View full text and thread]

03/05/2001 11:02 AM by Rodrigo; 3rd degree discrimination

Hi, Brandon, I have a case for 3rd degree price discrimination. 3rd degree discrimination occurs when different submarkets are charged different linear price functions. This discrimination is founded on observable signals about consumer [View full text and thread]

03/04/2001 11:51 PM by Brandon; Is this peak-load pricing or 3rd degree price discrimination?

Hi! I'm not very sure if the following is a case of 3rd degree price discrimination or peak-load pricing. Need a little help. Thank you! My 1st guess is that peak-load pricing is being carried out here but I'm not too sure.

"Consider an island served by 1 ferry company. There're 2 types of people who visit the island; day trippers who come in the morning to enjoy the island's beaches and leave in the evening, and permanent summer residents who come to the island on Friday night to spend the weekend and then leave on Monday morning to return to work. The ferry service has a same day round trip fare & a one way trip fare. The one-way trip fare is more than half the price of the round trip fare"

My thoughts initially is that the ferry company has to decide on the peak period and decide on the size of the fleet. Since the Capital outlay for the ferries vary is the owner choose to have a large capacity for the peak demand or a smaller fleet just to cater for a "full capacity" on a off-peak day, peak-load pricing is evident here. Am i correct or this is a case of 3rd degree price discimination instead? [Manage messages]