It makes the most sense to use price skimming as a pricing policy when demand is relatively elastic in the upper ranges of the demand curve.

Question

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Price skimming is most effective when demand is relatively inelastic, meaning that customers are willing to pay a higher price for a new and unique product. When demand is elastic, customers are more price-sensitive and will be less likely to purchase the product at a high price. In this case, a penetration pricing strategy may be more effective.

It Makes the Most Sense to Use Price Skimming as a Pricing