Many firms first use skimming prices and then apply penetration pricing. An advantage of this strategy is that
A) a high initial price discourages competitors from entering the market.
B) innovators are usually price elastic.
C) after the initial upscale market is saturated, lower prices effectively appeal to the mass market.
D) skimming prices seek to maximize sales.

Question

Quizplus · Accepted Answer

This strategy allows firms to initially target consumers who are willing to pay a higher price, maximizing early profits, and then lower prices to attract a broader customer base once the initial market is saturated.

Many Firms First Use Skimming Prices and Then Apply Penetration