What is the nature of differential pricing in Economic Demand Management?

Differential pricing in Economic Demand Management involves adjusting prices based on demand levels at different times. The nature of this approach is that it reflects the willingness of consumers to pay varying amounts depending on the time of service or product usage. Establishing peak-hour surcharges effectively captures the higher willingness to pay during busy periods, which helps to manage demand by discouraging excessive use during high-traffic times. This method allows organizations to maximize revenue during peak times while potentially encouraging usage during off-peak times without extensive discounts, as would be seen in other options.