A manufacturer of a portable digital HD camera is considering a skimming pricing strategy for its new product. Which of the following conditions would argue against using a skimming pricing strategy for the camera?
A) There will be a large potential market, even if the product is sold at a high price.
B) Technological problems still exist for competitors; their products are not equivalent.
C) Increasing the volume sold reduces production costs substantially.
D) Consumers perceive a strong price-quality relationship for this product.
E) Many consumers in the target market are innovators.

Question

Quizplus · Accepted Answer

If increasing the volume sold reduces production costs substantially, a skimming pricing strategy may not be ideal because the manufacturer could benefit more from economies of scale by setting a lower price to increase sales volume.

A Manufacturer of a Portable Digital HD Camera Is Considering