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Dynamic pricing, also known as variable pricing, is a pricing strategy in which businesses adjust the prices of their products or services based on real-time supply and demand. This allows businesses to respond to changes in the market and maximize their revenue by charging more for their products or services when demand is high and less when demand is low.

Dynamic pricing is commonly used in industries such as transportation and hospitality, where prices can fluctuate based on factors such as the time of day, the season, or the availability of seats or rooms. For example, a ride-sharing company might use dynamic pricing to charge more for rides during peak hours or during special events, when there is a higher demand for rides.

Dynamic pricing can also be used in online marketplaces, where prices can change based on factors such as the popularity of the product or the number of competitors selling the same product. For example, an online retailer might use dynamic pricing to adjust the prices of its products based on changes in the market, such as the introduction of a new competitor or a shift in consumer preferences.

Overall, dynamic pricing is a pricing strategy that allows businesses to adjust their prices in real-time based on changes in the market. This can help businesses maximize their revenue and respond to changes in supply and demand.

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