Due to its simplicity, this is the most widely used method of pricing with around 74% of companies in the United States employing this dynamic pricing strategy. Although widely used, the usage is skewed, with companies facing a high degree of competition using this strategy the most, on the other hand, companies that deal with manufacturing tend to use this strategy the least. Pricing based on competitors Businesses that want to price competitively will monitor their competitors’ prices and adjust accordingly. This is called competitor-based pricing. In retail, the competitor that many companies watch is Amazon, which changes prices frequently throughout the day. Amazon is a market leader in retail that changes prices often, which encourages other retailers to alter their prices to stay competitive. Such online retailers use price-matching mechanisms. The retailers give the end-user an option for the same, and upon selecting the option to price match, an online bot searches for the lowest price across various websites and offers a price lower than the lowest. Such pricing behavior depends on market conditions, as well as a firm's planning. Although a firm existing within a highly competitive market is compelled to cut prices, that is not always the case. In case of high competition, yet a stable market, and a long-term view, it was predicted that firms will tend to cooperate on a price basis rather than undercut each other. It needs to be pointed out that the three conditions are necessary in the case of firms deciding to forego competitive pricing. Pricing based on value or elasticity Ideally, companies should ask the price for a product that is equal to the value a consumer attaches to a product. This is called value-based pricing. As this value can differ from person to person, it is difficult to uncover the perfect value and have a differentiated price for every person. However, consumers' willingness to pay can be used as a proxy for the perceived value. With the price elasticity of products, companies can calculate how many consumers are willing to pay for the product at each price point. Products with high elasticities are highly sensitive to changes in price, while products with low elasticities are less sensitive to price changes (ceteris paribus). Subsequently, products with low elasticity are typically valued more by consumers if everything else is equal. The dynamic aspect of this pricing method is that elasticities change