A Skim Strategy for Pricing Works Best When

question 12

Multiple Choice

A skim strategy for pricing works best when:

• A) Many competitors are located nearby
• B) The product offered is easily replicated by competitors
• C) Perceived value of the product is very important to the customer
• D) Customers are not price sensitive

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Definitions:

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.

Equity

The value of an owner's interest in a property or business, after all debts associated with that property or business are paid off.

EBIT

EBIT, which stands for Earnings Before Interest and Taxes, calculates a company's earnings without considering income tax and interest expenses.

Ending Equity

The value remaining for shareholders after subtracting liabilities from assets, evaluated at the end of an accounting period.