Club Med, which operates a number of vacation resorts, offers vacation packages at a lower price in the winter (i.e., the "off season") than in the summer. This practice is an example of:
A) peak-load pricing.
B) intertemporal price discrimination.
C) two-part tariff.
D) bundling.
E) Both A and B are correct.

Question

Quizplus · Accepted Answer

Club Med's practice of charging different prices for vacation packages in the winter versus the summer is an example of both peak-load pricing and intertemporal price discrimination. Peak-load pricing involves adjusting prices in response to demand fluctuations at different times, while intertemporal price discrimination involves charging different prices at different times for the same product or service.

Club Med, Which Operates a Number of Vacation Resorts, Offers