A Skim Pricing Strategy Would Likely Be Most Effective in Selling

question 106

Multiple Choice

A skim pricing strategy would likely be most effective in selling which of the following?

• A)shampoo and bath soap
• B)any convenience item
• C)anything easily copied by competitors
• D)an electronic device which involved a great deal of research and development to bring to market
• E)most items at EDLP retailers such as Wal- Mart

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute cheaper goods for more expensive ones.

Wage Decrease

A reduction in the pay rate of a worker or a group of workers.

Labor Supply

The total hours that workers are willing and available to work at a given wage rate, within a specific labor market.

Leisure

The time available for ease and relaxation when no work is done.