Uber uses a pricing strategy based on real-time market conditions. It charges less in periods of low demand and more during periods of high demand. Sometimes these prices double or triple during periods of high demand. Uber argues that these higher prices motivate more drivers to pick up passengers, thus increasing the supply of drivers needed to handle the additional demand. This demand-based pricing strategy is an example of
A)special-event pricing.
B)penetration pricing.
C)dynamic pricing.
D)cost-plus pricing.
E)reference pricing.

Question

Quizplus · Accepted Answer

The pricing strategy used by Uber, which involves charging less during periods of low demand and more during periods of high demand, is an example of dynamic pricing. This is because the pricing varies in real-time based on market conditions and demand, and it is designed to maximize revenue and utilization of resources. This approach is commonly used in the airline, hotel, and transportation industries.

Uber Uses a Pricing Strategy Based on Real-Time Market Conditions