A Skimming Pricing Policy Is Likely to Be Most Effective

question 288

Multiple Choice

A skimming pricing policy is likely to be most effective when: (1) lowering the price has only a minor effect on increasing sales volume and reducing unit costs; (2) when the high initial price does not attract competitors; (3) customers interpret high price as signifying high quality; and (4) __________.

• A)enough customers are willing to buy immediately at the high initial price
• B)consumers tend to be price sensitive
• C)it will be easier to set measurable sales unit goals
• D)a lower price will significantly reduce unit costs
• E)consumers perceive your product to be similar to other products on the market

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Definitions:

Prenuptial Agreement

A contract entered into prior to marriage specifying the distribution of assets in the event of divorce or death.

Ownership Rights

The legal rights to use, control, and dispose of property or assets.

Post Hoc Ergo Propter Hoc

A logical fallacy that occurs when it is assumed that because one event followed another, the first event caused the second.

Equitable Theory

A branch of law that is concerned with fairness and justice, often applied when traditional legal remedies are inadequate.