You own a franchise of rental car agencies in Florida. You recently read a repor

Question

You own a franchise of rental car agencies in Florida. You recently read a report indicating that about 80 percent of all tourists visit Florida during the winter months in any given year, and that 60 percent of all tourists traveling to Florida by air rent automobiles. Travelers not planning ahead often have great difficulty finding rental cars due to high demand. However, during nonwinter months tourism drops dramatically and travelers have no problem securing rental car reservations.

Determine the optimal pricing strategy for this situation.

a. Randomized pricing

b. Peak-load pricing

c. Block pricing

d. Two-part pricing

Explanation / Answer

"B"

Peak load pricing, peak load pricing is a method to price services which are high in demand for a certain part of the year. It allows earning a better profit during the peak period.

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