All of the Following Are True About a Skimming Pricing

question 69

Multiple Choice

All of the following are true about a skimming pricing strategy when used during the introduction stage of the product life cycle EXCEPT:

• A)it capitalizes on the price insensitivity of early buyers.
• B)its profit margins may be high.
• C)it encourages "me too" entrants into the market.
• D)it recovers the R&D costs of the new offering.
• E)it helps build unit volume.

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Definitions:

Total Dollar Return

The overall financial gain or loss on an investment, including capital gains, interest, dividends, and distributions, calculated in absolute dollar terms.

Shares

Instruments of corporate or financial asset ownership, shares entitle owners to a proportional division of profits, paid as dividends, upon declaration.

Dividend

A portion of a company's earnings distributed to shareholders, often in the form of cash or additional shares.

Variance

A statistical measure that represents the average squared deviation from the mean, used to indicate the spread of a set of data points.