Please read this article from the New York Times and answer the following questions.
1. Why did the variable pricing model for Coke vending machines in early 2000’s fail to work? ( Note: Variable price model refers to prices being linked to demand and not to other variables like quality, etc.)
2. Why does the surge pricing model work in case of Uber? Isn’t it the same thing?
3. Fill in the blanks:
A. When the firm faces an inelastic demand curve (Like on a hot day for Coca Cola and at peak rush hour for Uber), and the firm increase its prices, their revenues will _____________increase/ decrease
B. When the firm faces an Elastic demand curve (Like on a cold day for Coca Cola and at non-peak rush hour for Uber),and the firm increases its prices, their revenues will _____________increase/ decrease
