Dynamic pricing is a strategy where the price of a product or service changes based on various factors, such as demand, time, and competition. For example, airlines often adjust ticket prices based on how many seats are left and how close the flight date is. This allows businesses to maximize revenue by charging more when demand is high and offering discounts when demand is low. This pricing model is commonly used in industries like travel, hospitality, and e-commerce. Companies utilize algorithms and data analysis to determine the best prices at any given moment, ensuring they remain competitive while meeting customer needs.