Economics Price Discrimination Questions
Dynamic pricing refers to the practice of adjusting prices in real-time based on various factors such as demand, supply, customer preferences, and market conditions. In the context of price discrimination, dynamic pricing allows businesses to charge different prices to different customers or segments of customers based on their willingness to pay. By continuously monitoring and analyzing market data, businesses can set prices that maximize their profits by charging higher prices to customers with a higher willingness to pay and lower prices to customers with a lower willingness to pay. This strategy enables businesses to capture more consumer surplus and increase their overall revenue.