Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is business travel, which illustrates pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as .
A) demand-based; secondary market pricing
B) demand-based; differential pricing
C) demand-based; periodic discounting
D) cost-plus; secondary markup
E) cost-plus; periodic discounting

Question

Quizplus · Accepted Answer

The first strategy is demand-based pricing, as it adjusts prices based on expected demand (higher on weekdays due to business travel). The second strategy is differential pricing, offering discounts based on the timing of the purchase relative to the travel date.

Amtrak Is Considering Two Pricing Strategies for Its Service