Certain highways in British Columbia require users to pay a toll for their use. Toll prices vary according to the time of day, demonstrating the use of:
A) Penetration pricing
B) Cost-based pricing
C) Price skimming
D) Peak load pricing

Question

Quizplus · Accepted Answer

Peak load pricing is the practice of charging higher prices during times of high demand and lower prices during times of low demand. The toll prices in British Columbia vary according to the time of day, which indicates peak load pricing. Penetration pricing involves setting a low price initially to penetrate the market, cost-based pricing involves setting prices based on the cost of producing the product or service, and price skimming involves setting a high price initially and gradually lowering it over time. None of these pricing strategies apply to the toll prices in British Columbia.

Certain Highways in British Columbia Require Users to Pay a Toll