Economics · Level 3 · 200 words
When One Seat Has Three Prices
Original passage © Studio AM, written for Fluency.
Three passengers share one row of a train. One bought a nonrefundable ticket two months early. Another purchased a flexible ticket yesterday. The third used a last-minute discount for an empty seat. They receive the same ride but pay different prices.
This is price discrimination: a seller charges different prices based on purchasing conditions or customer groups, not just a different product. Timing, refund rights, demand, membership, age, or restrictions can separate offers.
The seller faces a perishable capacity problem. Once the train leaves, an empty seat cannot be stored for tomorrow. Early low prices may attract price-sensitive travelers and provide advance information about demand. Higher flexible fares can serve travelers who value changing plans. A late discount may fill capacity that would otherwise earn nothing.
Different prices do not automatically prove unfairness, efficiency, or deception. The judgment depends on transparent rules, access, market power, protected categories, and local law. A hidden fee differs from a clearly stated restriction, even if both affect the total price. The three passengers buy bundles of ride, timing, risk, and flexibility. The seat looks identical, but the promises around it differ. Understanding those promises explains the pattern without deciding whether every example is justified.
Source: Written for Fluency. Original passage © Studio AM, written for Fluency.