Final answer:
Smart vending machines exemplify flexible price-setting by automatically adjusting prices in response to demand factors, showing how dynamic pricing strategies are applied in modern commerce.
Step-by-step explanation:
Smart vending machines that adjust prices automatically according to changes in demand factors, such as time of day or outside temperature, are examples of flexible price-setting. These machines utilize advanced technology to optimize sales and profits by adapting to real-time market conditions. This capability reflects the broader economic principle of supply and demand where price fluctuation is influenced by various factors that affect market behavior. This concept diverges from traditional fixed price models, showing a shift towards a more dynamic pricing strategy in certain sectors of the economy.
For instance, during a hot day, a smart vending machine may increase the price of cold beverages, knowing that the demand is likely to be higher. Conversely, during colder weather, the price might drop to encourage sales. This instant adjustment represents the interplay of supply and demand, and the machine's built-in technology automates these economic principles to function in a commercial environment without the need for manual intervention.