Certified Professional Category Analyst (CPCA) 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer is dynamic pricing, which is a strategy that allows businesses to adjust prices in real time based on current market demand. This approach is particularly effective in sectors where demand can fluctuate significantly, such as travel, hospitality, and e-commerce. By analyzing various factors such as customer behavior, time, and competitive pricing, businesses can optimize their pricing to capture maximum revenue. Dynamic pricing enables companies to respond quickly to changes in demand, ensuring that they can maximize profits during peak periods while remaining competitive when demand drops.

In contrast, cost-plus pricing involves setting prices based on the cost of production plus a markup, which does not take into account fluctuations in demand. Penetration pricing is focused on gaining market share by setting lower prices initially, rather than adjusting them based on demand. Price skimming aims to maximize revenue by setting higher prices for a new or innovative product before gradually lowering them over time, also not directly tied to real-time demand adjustments. Thus, dynamic pricing is the strategy that aligns most closely with the principle of maximizing revenue by responding to demand variations.