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Peak Pricing

Peak pricing refers to the practice of charging higher prices for goods or services during times of high demand. This pricing strategy is often used to maximize profits by taking advantage of increased demand for a product or service.

Peak pricing is often used in industries where the supply of a good or service is limited or fixed, such as the airline, hotel, and entertainment industries. For example, an airline may charge higher prices for flights during the summer vacation season when demand is high, while offering lower prices during the winter months when demand is lower. Similarly, a hotel may charge higher prices during peak tourist seasons and events, while offering lower prices during off-peak times.

Peak pricing can also be used in industries where the supply of a good or service can be increased to meet demand, such as the electricity and transportation industries. For example, an electricity provider may charge higher prices during peak usage times when demand for electricity is high and the cost of generating power is higher, while offering lower prices during off-peak times when demand is lower and the cost of generating power is lower.

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