If you are evaluating the effect that a price change will have on customer demand, which value-based pricing capability are you considering?

When evaluating the effect that a price change has on customer demand, you are primarily focusing on pricing economics. This concept involves understanding how price levels influence consumer behavior, including demand fluctuations in response to price changes. It encompasses the relationship between price and quantity demanded, often analyzed through demand curves and elasticity of demand.

Pricing economics takes into account how various factors, such as consumer preferences, market competition, and perceived value of products or services, impact the decision-making process of customers regarding their purchasing choices as prices change. Understanding this relationship helps businesses optimize their pricing strategies to align with customer willingness to pay, thereby maximizing revenue.

While other options involve aspects of pricing strategies, they do not directly address the analysis of how price changes affect customer demand. Customer value analysis pertains more to understanding what attributes customers find valuable and how these influence pricing, while pricing dynamics looks at market behaviors over time. Pricing ethics covers the moral implications of pricing strategies but is not focused on the economic principles underlying customer demand.