The average price Xerox charged when it introduced the first stand-alone fax machine was $12,700. This premium price was a way for Xerox to recoup some of the research and development costs that went into production. Xerox used ________.
A) a skimming price
B) a trial price
C) penetration pricing
D) prestige pricing
E) target costing

Question

Quizplus · Accepted Answer

A skimming price involves setting a high price initially for a new product to capture early adopters who may pay a premium price. This strategy is often used to recoup research and development costs. Xerox's pricing strategy of charging $12,700 for the first stand-alone fax machine fits the description of a skimming price.

The Average Price Xerox Charged When It Introduced the First