When a firm wants to inventory demand via a reservation system and has insufficient capacity it should lower prices selectively.

Question

Quizplus · Accepted Answer

Lowering prices selectively when capacity is insufficient and demand is being inventoried via a reservation system could exacerbate the problem by increasing demand further. Instead, the firm might consider raising prices or using other methods to manage demand and capacity more effectively.

When a Firm Wants to Inventory Demand Via a Reservation