The sales analysis of a product revealed that profits were highest when it was initially introduced into the market with a high selling price.However,the price was gradually reduced as it started facing competition,as substitutes entered the market.This is an example of
A)introductory price dealing.
B)a temporary price cut policy.
C)a skimming price policy.
D)a penetration price policy.
E)a one-price policy.

Question

Quizplus · Accepted Answer

A skimming price policy tries to sell to the top of a market-the top of the demand curve-at a high price before aiming at more price-sensitive customers.It is generally employed when a product has few substitutes as competition in the market.Such a policy usually involves a slow reduction in price over time,as producers seek to target new markets.

The Sales Analysis of a Product Revealed That Profits Were