Demand pricing is a strategy where the price of a product or service is adjusted based on the level of demand from consumers. When demand is high, prices may increase to maximize revenue, while lower demand can lead to price reductions to attract more buyers. This approach helps businesses respond to market conditions effectively. This pricing model is commonly used in industries like airlines, hotels, and event ticketing, where prices fluctuate based on factors such as time, availability, and consumer interest. By analyzing demand patterns, companies can optimize their pricing to enhance profitability and manage inventory more efficiently.