When StarSignal introduced its fax machine for receiving and sending color documents, it charged $26,000-a lot more than fax machines usually cost. More than likely, StarSignal was trying to recoup its product development costs by using _____ pricing.
A) market-skimming
B) market-absorption
C) market-penetration
D) cost-plus
E) value-set

Question

Quizplus · Accepted Answer

Market-skimming pricing involves setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price. StarSignal's strategy of charging a lot more for its new fax machine fits this description, as it aims to recoup development costs quickly from customers less sensitive to price.

When StarSignal Introduced Its Fax Machine for Receiving and Sending