Charging different prices at different times to reduce capacity constraints is called:
A) Penetration pricing
B) Transfer pricing
C) Peak load pricing
D) Price skimming

Question

Quizplus · Accepted Answer

Peak load pricing is the practice of charging different prices at different times to reduce capacity constraints. This strategy allows businesses to take advantage of high demand periods by charging a premium price, while also encouraging customers to purchase during off-peak times when prices are lower. Penetration pricing is used to gain market share by offering low prices, while price skimming involves charging a premium price for new or unique products. Transfer pricing is for internal accounting and tax purposes, used to allocate costs between different business units.

Charging Different Prices at Different Times to Reduce Capacity Constraints