> Dynamic pricing implies charging two different concurrent customers different prices for the same good or service.
That is price discrimination, not dynamic pricing. Price discrimination involves charging more or less based on the buyer’s perceived willingness and ability to pay. Dynamic pricing is based on fluctuations in consumer demand. A taxi ride at midnight is not the same as a taxi ride at noon; if there are proportionally fewer drivers available at midnight, fares will be higher at midnight.
The same principle may be applied in the restaurant industry; kitchen throughput has limits. If these limits are reached during peak hours, the restaurant can either raise prices during these hours or reduce prices outside of these hours to spread out the consumer demand, maximizing earnings during peak times while reducing kitchen idle time during off-peak hours.
That is price discrimination, not dynamic pricing. Price discrimination involves charging more or less based on the buyer’s perceived willingness and ability to pay. Dynamic pricing is based on fluctuations in consumer demand. A taxi ride at midnight is not the same as a taxi ride at noon; if there are proportionally fewer drivers available at midnight, fares will be higher at midnight.
The same principle may be applied in the restaurant industry; kitchen throughput has limits. If these limits are reached during peak hours, the restaurant can either raise prices during these hours or reduce prices outside of these hours to spread out the consumer demand, maximizing earnings during peak times while reducing kitchen idle time during off-peak hours.