Market skimming is a short-term price objective that involves setting a minimum price that equals direct variable costs.

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Market skimming is actually a long-term price objective that involves setting a high price for a new and unique product in order to maximize profits from early adopters willing to pay a premium. The price may be lowered over time as competitors enter the market or as the product becomes more mainstream. The price set in market skimming is usually well above direct variable costs.

Market Skimming Is a Short-Term Price Objective That Involves Setting