Price skimming involves ________.
A) setting an initial low price to establish a new product in the market
B) setting a limited number of prices for certain categories or products
C) taking advantage of the fact that consumers don't always respond rationally to prices
D) setting an initial high price to cover new product costs and generate a profit

Question

Quizplus · Accepted Answer

Price skimming involves setting an initial high price to cover new product costs and generate a profit. This strategy is typically used for innovative products with high demand and limited competition, and allows the company to gradually lower the price as competitors enter the market.

Price Skimming Involves ________