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Attempts to prevent arbitraging the two prices

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Reference no: EM131298725

Explain how the following cases involve price discrimination, and how the seller attempts to prevent arbitraging the two prices:

1. A cement firm requires in a sale that it delivers the cement to the buyer, and wants to know the buyer's location.

2. An airline requiring that the passenger spend a Saturday night in the destination (i.e., away from home) for any discounted ticket price.

3. Peak-load pricing, which occurs when the price changes over time (e.g., during the day) to be higher at peak demand periods and lower at low demand periods (think of a bridge toll, where the toll is highest at rush hour but lowest at off-peak times such as in the evening).

Reference no: EM131298725

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