Uncertainty in Pricing
When demand is unknown, there is potential for uncertainty in pricing. An easy way to identify uncertainty is to categorize the number and variety of consumers who shop in a particular retail store.
A company establishes a marketing survey and two categories of consumers: High-value customers are prepared to pay $10 for a product, and low-value customers are prepared to pay only $7 for a product.
The survey shows there are equal numbers of high-value and low-value customers. So, there are two conceivable price possibilities: The company can sell the product for a high price ($10) to only the high-value section, or sell the product for a low price ($7) to everyone.
