A firm sets high prices for a product innovation and lowers the price as the product moves into other stages of the product life cycle.The firm is most likely using a pricing strategy of ________.
A) market skimming
B) product positioning
C) market penetration
D) maximum current profit

Question

Quizplus · Accepted Answer

The firm is using a market skimming pricing strategy, which involves setting a high price for a new or innovative product to maximize profits before competitors enter the market. As the product moves into other stages of the product life cycle and faces competition, the firm lowers the price to maintain market share.

A Firm Sets High Prices for a Product Innovation and Lowers