Which statement is true?

Question

Quizplus · Accepted Answer

Airlines use the Saturday-night-stay requirement as a way to separate business travelers who tend to travel on weekdays from leisure travelers who tend to stay over weekends. This allows the airline to charge higher prices to business travelers who tend to have less price sensitivity and are willing to pay more for the flexibility of traveling on weekdays. This is an example of price discrimination. Option A is incorrect as price discrimination can still allow some consumer surplus. Option B is also incorrect as the main motivation for price discrimination is to increase profits. Option D is incorrect as option C is true.

Which Statement Is True