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(n) _____.
A) introductory price dealing
B) temporary price cut policy
C) skimming price policy
D) penetration price policy
E) one price policy

Question

Quizplus · Accepted Answer

This is an example of a skimming price policy, where a high initial price is set for a new product to maximize profits from early adopters who are willing to pay a premium. As competition increases, the price is lowered to attract a wider customer base.

The Sales Analysis of a Product Revealed That Profits Were