When Apple Inc.developed and introduced the iPhone it was unique as it essentially combined a cellular phone with an iPod,an Internet browser,and email capabilities.As such,in the short run it seemed that demand for the product would be inelastic,with no real existing competition.The recommend pricing strategy in such a situation would be:
A) low initial price,rising slightly when entering the growth stage
B) high initial price,falling slightly when entering the growth stage
C) high price,continuing through growth and maturity
D) low price,continuing through growth and maturity
E) low price initially,rising constantly through growth and into maturity

Question

Quizplus · Accepted Answer

A high initial price is used when a new product faces little competition,needs to recoup R&D costs,and has inelastic demand.Prices will fall slightly when entering the growth stage.