High Training Costs Make It More Costly for Consumers to Switch

question 128

Multiple Choice

High training costs make it more costly for consumers to switch products.This is an example of

• A)Contestable markets.
• B)Cartels.
• C)Government regulation.
• D)Barriers to entry.

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Definitions:

Skimming Pricing Policy

A pricing strategy in which a company sets relatively high prices at the launch of a new product to maximize profit margins from customers willing to pay the premium price.

Price-sensitive

Refers to how demand for a product is influenced by changes in its price; price-sensitive consumers are likely to change their purchasing behaviors significantly in response to price changes.

High Initial Price

A pricing strategy where a product is introduced to the market at a high price point to maximize revenue from less price-sensitive customers before possibly lowering the price.

Skimming Pricing

A pricing strategy involving setting high prices initially to target consumers who are willing to pay more for new or unique products.