PRC-3 · Chapter 7 · Question 10 of 72
A company launches a highly anticipated, innovative video game console. Knowing demand will exceed supply initially, they set the price exceptionally high to capture early adopters willing to pay more, maximizing early profits. They plan to lower the price later. What pricing strategy is this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Price skimming
Explanation
Price skimming involves setting a high price for a new, innovative product before competitors arrive, to 'skim' maximum revenues layer by layer from the segments willing to pay the high price.
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