Which statement best describes variable pricing versus fixed pricing strategies?

Which statement best describes variable pricing versus fixed pricing strategies?

• A. Variable pricing stays constant; fixed pricing changes with demand.
• B. Fixed pricing changes with demand; variable pricing stays constant.
• C. Both pricing strategies vary with demand.
• D. Variable pricing changes with demand; fixed pricing stays constant.

Answer: (D)

Variable pricing is the practice of adjusting prices in response to demand and other market conditions. Fixed pricing, by contrast, keeps the price the same regardless of demand, at least for a given period or set of conditions. So the statement that best describes these strategies is that variable pricing changes with demand while fixed pricing stays constant. In practice, variable pricing appears in airlines, hotels, ride-sharing, and other markets where prices rise when demand is high and fall when it’s low. Fixed pricing is common for many consumer goods or services with a announced price that doesn’t move unless there’s a formal promotion or change in policy. The other descriptions incorrectly swap or merge these ideas, making them inconsistent with how variable and fixed pricing behave.

Variable pricing is the practice of adjusting prices in response to demand and other market conditions. Fixed pricing, by contrast, keeps the price the same regardless of demand, at least for a given period or set of conditions. So the statement that best describes these strategies is that variable pricing changes with demand while fixed pricing stays constant.

In practice, variable pricing appears in airlines, hotels, ride-sharing, and other markets where prices rise when demand is high and fall when it’s low. Fixed pricing is common for many consumer goods or services with a announced price that doesn’t move unless there’s a formal promotion or change in policy. The other descriptions incorrectly swap or merge these ideas, making them inconsistent with how variable and fixed pricing behave.