key term - Dynamic pricing

Definition

Dynamic pricing is a strategy where businesses set flexible prices for products or services based on current market demands. Prices are adjusted in real time as the demand for the product increases or decreases, or as competitor prices change.

Related terms

Market Demand: The total amount of a product or service that consumers are willing and able to purchase at various price levels at a given point in time.

Supply and Demand:

An economic model that determines the price level of a good or service based on the quantity supplied by producers and the quantity demanded by consumers.

Price Elasticity:

A measure of how much the quantity demanded of a good responds to a change in its price, with elasticity indicating greater responsiveness