Freight-absorption pricing is used for market skimming and holding on to monopolistic markets.

Question

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Freight-absorption pricing is actually used to penetrate new markets or to compete with other businesses in the market. It involves pricing products at a level that includes the shipping or transportation costs, so that the seller is able to offer free or reduced-cost shipping to the customers. This can help businesses to attract customers who are price sensitive or who want to avoid paying extra for shipping. It is not typically associated with market skimming or maintaining monopolistic markets.

Freight-Absorption Pricing Is Used for Market Skimming and Holding on to Monopolistic