Uber makes the following statement on its website: In . . . cases of very high demand,

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Uber makes the following statement on its website: “In . . . cases of very high demand, fares may increase to help ensure those who need a ride can get one. This system is called surge pricing, and it lets us continue to be a reliable choice.” Does surge pricing help “ensure that those who need a ride can get one” and allow Uber to be more “reliable” in the sense that a driver will show up quickly? Assume that Uber has a capacity constraint. Use a diagram to illustrate your reasoning.

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Managerial Economics And Strategy

ISBN: 9780134899701

3rd Edition

Authors: Jeffrey M. Perloff, James A. Brander

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