The practice of setting prices highest when the quantity demanded for the product approaches capacity:
A) predatory pricing.
B) target pricing.
C) peak-load pricing.
D) price fixing.

Question

Quizplus · Accepted Answer

Peak-load pricing is the practice of setting prices highest when the quantity demanded for the product approaches capacity. This strategy allows companies to maximize profits during times of high demand, when customers are willing to pay more for limited availability of goods or services. Predatory pricing involves selling goods or services at artificially low prices to drive competitors out of business. Target pricing is a strategic approach that involves setting prices based on the perceived value of a product or service to a particular target market. Price fixing is a type of illegal collusion between competitors to set prices at fixed levels to reduce competition.

The Practice of Setting Prices Highest When the Quantity Demanded