Asked by Jhane Hemingway on Jun 01, 2024
Verified
When pricing new products, one strategy that can be used is price skimming where the initial product price is set low and in doing this management hope the product will be widely accepted in the long term.
Price Skimming
A pricing strategy where a seller charges a relatively high price for a product at first, then lowers the price over time.
- Understand the different pricing methodologies, such as markup pricing and price skimming, and their uses.
Verified Answer
ZK
Zybrea KnightJun 02, 2024
Final Answer :
False
Explanation :
Price skimming involves setting the initial product price high and then gradually lowering it as demand wanes. This strategy is often used for new and innovative products with high demand and limited competition.
Learning Objectives
- Understand the different pricing methodologies, such as markup pricing and price skimming, and their uses.