Which of the following statements pertaining to a market skimming pricing strategy is not true?
A) The strategy is favored when unit costs fall with the increase in units produced.
B) The strategy is favored when buyers are relatively insensitive to price increases.
C) The strategy is favored when there is insufficient market capacity and competitors cannot increase market capacity.
D) The strategy is favored when high price is perceived as high quality.

Question

Quizplus · Accepted Answer

Market skimming is not favored when unit costs fall with increased production, as this strategy involves setting high prices initially, not benefiting from economies of scale.

Which of the Following Statements Pertaining to a Market Skimming