Which of the following would likely be ineffective in supporting a market-skimming policy for a new product?
A)The product's quality and image must support its higher price.
B)Enough buyers must want the products at that price.
C)Competitors are not able to undercut the high price.
D)Competitors can enter the market easily.
E)The cost of producing a smaller volume is not so high that it negates the advantage of charging more per unit.

Question

Quizplus · Accepted Answer

A market-skimming policy involves setting a high price for a new product to generate high profit margins from early adopters who are willing to pay more. However, if competitors can easily enter the market and offer lower-priced alternatives, it will be difficult to sustain the high price and maintain profitability. Therefore, option D - competitors can enter the market easily - would make a market-skimming policy ineffective.

Which of the Following Would Likely Be Ineffective in Supporting