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.

Comprehension questions

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4 questions
1. What is the main idea of the passage?

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C. Travelers may pay different prices for the same seat because timing, flexibility, restrictions, and unused capacity change the offer.
The passage explains several price conditions and then separates explanation from moral or legal judgment.

2. Why might a seller offer a last-minute discount?

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D. An empty seat loses all sale opportunity once the train departs.
The third paragraph calls capacity perishable and explains that otherwise empty space earns nothing after departure.

3. What does “perishable” mean in the capacity paragraph?

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A. unable to be saved for sale after the departure time
The next sentence explains that today's empty train seat cannot be stored for tomorrow.

4. Which passenger buys a flexible ticket?

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B. the passenger who purchases yesterday
The opening example assigns yesterday's purchase to the flexible ticket.

Source: Written for Fluency. Original passage © Studio AM, written for Fluency.