Variable Pricing

Variable pricing is a business model where the price of a product or service changes based on market demand. It is commonly used in industries with limited supply like airlines and hotels, as well as by platforms like Airbnb and Uber. By adjusting prices according to demand, businesses can maximize profitability and offer competitive value. This strategy allows them to charge more during high-demand periods and lower prices when demand is low. Although there are risks such as customer dissatisfaction, when implemented effectively, variable pricing helps businesses optimize profits while still providing value to customers.