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Price Discrimination

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Airline fares are higher in summer than in winter. Some railroads charge lower fares during the week than on weekends. Electric companies charge consumers lower rates the more electricity they use. Are these cases all examples of price discrimination? Why do companies engage in such behavior?

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On airline fares:
Summer is a peak season for travelers. During winter, people choose to stay at home rather than go outside. The only thing that will change the consumers' mind is a cheaper ticket.

On railroad fares:
During weekends there is a significant number of people using railroad as a means of transportation. There are overcrowding during this time of the week. To avoid this, railroad management hoped that a ...

Solution Summary

The solution the rationale and explains why there is price discrimination in various products and services. Examples given are airline fares, railroads fare, and electricity cost. Additionally, this solution includes three reference sources for further investigation of the topic.