A manufacturer of a digital video recorder (DVR)is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue AGAINST using a skimming pricing strategy for the DVR?
A)large potential market,even at a high price
B)technological problems still exist for competitors
C)increasing volume reduces production costs substantially
D)consumers perceive a price-quality relationship
E)consumers are innovators

Question

Quizplus · Accepted Answer

Skimming pricing strategy involves setting a high price for a new product to maximize profits from customers who are willing to pay a premium for the innovative product. However, if increasing volume reduces production costs substantially, it becomes difficult to justify the high price as competitors may soon enter the market with a lower price, leading to reduced demand for the product. Therefore, condition C argues against using a skimming pricing strategy for the DVR. The other conditions listed do not necessarily argue against using a skimming pricing strategy.

A Manufacturer of a Digital Video Recorder (DVR)is Thinking of Using