The manufacturer of a new variety of fat-free ice cream that has the consistency and taste of regular ice cream is considering using a skimming pricing strategy for its new product.Which of the following conditions would suggest using a skimming pricing strategy for the tasty fat-free ice cream?

Question

Quizplus · Accepted Answer

A firm introducing a new product can use skimming pricing, setting the highest initial price that those customers really desiring the product are willing to pay.When buyers are less price-sensitive and the product they are buying is unique or is high in quality and prestige, the product is said to have inelastic demand.This holds true for fat-free ice-cream in this scenario.

The Manufacturer of a New Variety of Fat-Free Ice Cream