Lush Cosmetics, a firm based in the U.S., recently started exporting cosmetics to India. Lush introduced a new range of mineral-based makeup for the first time in the Indian market. It was also priced much higher than the other brands in the market. This is an example of _____.

Question

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A company uses skimming when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received. When a company is the only seller of a new or innovative product, a skimming price may be used to maximize profits until competition forces a lower price.

Lush Cosmetics, a Firm Based in the U