Question

Uber provides point to point car transport services in Brisbane. Generally, the price per kilometre is a fixed amount. However, when demand is far greater than supply, prices per kilometre surge (rise rapidly), encouraging more drivers onto the road to drive for Uber. Which of the following statements are true: The price surge is an example of third degree price discrimination. The price surge is an example of peak load pricing. With the price surge, drivers with expensive cars are more likely to drive. The price surge will not see the quantity of car transport services increase.
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Solution: The price surge is an example of peak load pricing

Explanation: Peak load pricing is defined as a form of congestion pricing when the customers pay an extra fee during periods of high demand. Uber surge pricing is a an example of peak load pricing.

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