Setting a High Initial Price to Cover New Product Costs

question 163

Multiple Choice

Setting a high initial price to cover new product costs and generate a profit is

• A)penetration pricing.
• B)price maximization.
• C)ceiling pricing.
• D)price skimming.
• E)overpricing.

---

Definitions:

Financial Risk

The possibility of losing money on an investment or business venture.

Open Market Operations

Technique in which the Fed buys or sells government bonds to affect the supply of money and credit.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that must be held by a commercial bank, used as a tool in monetary policy.

Investment Banker

An investment banker is a financial professional who advises and assists corporations and governments in raising capital, through issuing and selling securities.