
An article on how hotel prices rose during the solar eclipse on August 21, 2017 noted that in Hopkinsville, Kentucky: "At the local La Quinta Inn & Suites, prices are $425 a night, up from a $93 average on Google for the weekend before."
Source: David Gernon, "Once-in-a-lifetime solar eclipse is a bonanza for hotels, airlines," cnbc.com, July 27, 2017.
Which of the following statements is true?
A) The La Quinta Inn & Suites is practicing first-degree price discrimination by charging what the market will bear.
B) This is evidence of third-degree price discrimination because hotel accommodation on a particular day is not a product that can be resold later.
C) There is no evidence of price discrimination; the La Quinta Inn & Suites is responding to increased demand for hotel rooms in the face of constant supply.
D) The La Quinta Inn & Suites has adopted this pricing strategy to capitalize on arbitrage profits.
Correct Answer:
Verified
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