What do you think about dynamic pricing?

Hi there,
In general, in dynamic pricing, prices adjust according to the demand of the market. The best-known example of this concept is the pricing of flight tickets or the gas price from a gas station. Both businesses price their products via demand. If the demand is high, the prices will be high. Another well-known approach is a dynamic price based on the buyers' location. We often see this with physical goods. A good example is the price of an iPhone, which costs more in Germany than in the USA.

Compared to static pricing, dynamic pricing's main advantage is that the seller meets the demand of a market at a better price. This way, the seller avoids opportunity costs. In other words, he makes more money. He knows what to charge because he knows what buyers are willing to spend. On the other hand, you have to watch out how you are distributing your prices. You don't want to scare away your customers by too large fluctuation as well as you don't want them to feel disadvantaged.

So what's your opinion regarding dynamic pricing? And what other areas of application do you might see?