Price and demand have an inverse relationship. As price rises, demand will fall. It is important for a firm to price at the point which marginal revenue is equal to marginal cost because that is the point of profit maximization. After that point, further production would result in a greater marginal cost than marginal revenue (a loss on each subsequent item produced).
A firm should consider fair pricing because consumers often make decisions based on past prices, substitute products, and the purchase environment. That is, the lowest or highest price may not be enough for purchase. A fair price will not turn off the consumer and they will probably return for repeat purchase.
The internet has enhanced opportunities for dynamic pricing strategies by decreasing menu costs (changing the price of a product – stores or mail order cannot do it as cheaply as the Internet) and making interactivity easy and convenient. They can visit stores and comparison shop from the comfort of their homes.
A firm would want to implement a price-discrimination strategy in order to find the amount a consumer will pay for a product (first degree), find the amount a consumer is willing to pay for the first and also subsequent products (second degree), and in order to maximize revenue from all consumers ([some will pay more and some will pay less] third degree).
Static markets are those in which all variables are fixed. For example, in a static market, every consumer will purchase a product at a certain point; conversely, nobody will purchase a product at another (very high) point. This is not how the market truly is. The market is dynamic. Each consumer is different and will be willing to pay different prices for products or their substitutes.