An article on how prices in South Bend, Indiana rise during Notre Dame home football games noted: "For the Sept.16 game against the University of Michigan, the South Bend Marriott is charging $649 a night for a double room....The Marriott's regular weekend price is $149 a night."
Source: Ilan Brat, "Notre Dame Football Introduces Its Fans To Inflationary Spiral," Wall Street Journal, September 7, 2006, p.A1.
Which of the following statements is true?
A)The Marriott 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 Marriott is responding to increased demand for hotel rooms in the face of constant supply.
D)The Marriott has adopted this pricing strategy to capitalize on arbitrage profits.

Question

Quizplus · Accepted Answer

The Marriott is responding to increased demand for hotel rooms during a high-demand event, which is a common practice in hospitality and not necessarily price discrimination.

An Article on How Prices in South Bend, Indiana Rise