The Practice of Using Dynamic Pricing Was Started in the 1980’s

question 54

Multiple Choice

The practice of using dynamic pricing was started in the 1980’s by American Airlines as an effort to compete with a now out-of-business discounter airline, People’s Express. Dynamic pricing then moved to other industries, including hotels and car rental companies, but only became popular when e-commerce arrived.
You are a consultant to a number of different organizations that use dynamic pricing, including American Airlines, St. Louis Cardinals, Coca Cola, and Marriott International. You are advising your clients of the use of dynamic pricing. Here are some questions that they have raised:
-What is dynamic pricing?

• A)A pricing approach that uses analytics software to improve demand forecasting
• B)A pricing approach in which the price of an item changes based on the demographics of individual customers
• C)A pricing approach that adjusts prices based solely on fluctuations in competitor's prices
• D)A pricing approach where the price of an item changes frequently based on complex algorithms

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Definitions:

Resources Available

Refers to the total means available for economic and operational development, such as raw materials, manpower, and capital.

Economic Perspective

Viewing issues through the lens of economics, focusing on how resources are allocated, used, and managed to meet needs and achieve objectives.

State Government

The government of a specified state within a country, responsible for local laws and policies distinct from the federal government.

Football Stadium

A facility specifically designed for hosting football (soccer or American football) games and associated events.