Which of the following is true of the price skimming policy of pricing a product?
A)It is used when a product is new to the market.
B)It enables a company to enjoy a perfect competition environment in the market.
C)It attracts a large number of customers in the market.
D)It is useful for products that require less research and development expenses.

Question

Quizplus · Accepted Answer

The price skimming policy is typically used when a product is new to the market and there are few competitors. The strategy involves setting a high price initially and gradually lowering it as competitors enter the market. This allows a company to recoup its research and development expenses and maximize profits before facing competition. The strategy may not attract a large number of customers initially, but it can be an effective way to establish a premium brand image and capture early adopters who are willing to pay a premium for the product.

Which of the Following Is True of the Price Skimming