Which of the following scenarios best illustrates the concept of dynamic pricing?

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Dynamic pricing is a strategy where prices are adjusted in real-time based on various factors such as demand, occupancy levels, market conditions, and customer behavior. The scenario that best illustrates dynamic pricing is one where room rates change based on occupancy levels. This means that as the hotel fills up with guests, the prices may increase due to higher demand, while during off-peak times, rates may decrease to attract more bookings. This approach allows hotels to optimize their revenue and manage their inventory more effectively by responding flexibly to the market.

The other options represent fixed or rigid pricing strategies. Year-round fixed rates do not allow for adjustments based on market demand, and fixed rates for all guests eliminate the variability needed for dynamic pricing. Similarly, exclusive pricing for premium rooms does not illustrate dynamic pricing as it does not involve fluctuating rates based on demand or occupancy.

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