Question

Please help me in both questions, thank you very much :)

QUESTION 2 Helen runs a restaurant in South Bank. During the Brisbane River Fire event, Southbank restaurants are in very high demand. To meet the demand on this night, Helen has to hire additional staff and hire additional tables and chairs. As a result, Helen offers a Special River Fire' menu that is more expensive than her usual menu, although contains the same food. Which of the following statements are true: O Charging more during River Fire is an example of second degree price discrimination. O Charging more during River Fire is an example of peak load pricing. When Helen's costs are higher, she should not operate her restaurant. Helen does not have pricing power in this situation.

Answer 1

2. The peak load pricing is the prices charged by companies to the consumers for their products during festival seasons or time when consumer demand is highest. Therefore, peak load pricing is normally kept higher than pricing for products during normal business seasons. Here in the given case, during the Brisbane River fire event, the restaurant owner Helen offers "Special River File" menu to consumers, that is more expensive than Helen's usual food menu. The correct statement is

• Charging more during River Fire is an example of peak load pricing.

.3. Apple music is employing 2. Second degree price discrimination in offering a family package,

If raising its prices will never lead to greater profits for Apple Music, this would indicate that it has been forced to adopted a 10. Dominated strategy

If Jack purchases a family package, then sells access to Apple Music to Jill, he is engaging in 6. Arbitrage.

Explanation: In second degree price discrimination strategy, a firm charges different prices for selling its product or services.Under this price strategy, the firm offers discount to a customer or customer group for bulk purchase of its product or service. Here Apple music is offering different prices for its single user pack and family user pack. The Apple music is also offering some discounts on its family pack for a family having 6 or less people.

Dominated strategy is the strategy that earns comparatively less revenue or profits for a firm than other strategies. Here raising prices for services do not result high profits for Apple music.

Arbitrage strategy is simultaneous purchase and sale of a product or service by a person to earn some profits. Here Jack buys family pack of Apple Music and then sells access rights of purchased pack to Jill at higher price to earn some revenues.