optimal pricing theory

Optimal pricing theory refers to the strategy businesses use to set prices that maximize their profits while considering costs, consumer demand, and competitor pricing. It involves finding the right balance: charging enough to cover expenses and generate profit, but not so much that it drives customers away. By analyzing market conditions and consumer behavior, companies aim to determine the price at which they can sell the most products or services, ideally leading to the highest overall revenue. This approach helps businesses remain competitive while meeting their financial goals.