Adjusting a product's price based on supply conditions is known as what?

Dynamic pricing refers to the strategy of adjusting prices based on various factors, including supply conditions, demand fluctuations, and market trends. This pricing model allows businesses to respond quickly to changes in the marketplace, optimizing revenue and ensuring competitiveness. For instance, during periods of high demand or low supply, prices can be increased to maximize profit, while prices might be lowered when demand is low or supply is plentiful. This flexibility helps businesses manage inventory effectively and respond to consumer behavior in real time.

Other terms like menu pricing typically refer to a fixed pricing structure where prices are set in advance and displayed to customers. Supply pricing might imply a more straightforward adjustment based solely on supply metrics without considering demand dynamics, and asymmetrical pricing isn't a standard term used to describe price adjustments tied to supply or demand in business contexts. Thus, dynamic pricing accurately captures the essence of adjusting prices according to supply conditions.