A Skimming Pricing Strategy

question 194

Multiple Choice

A skimming pricing strategy

• A) allows low-income households the ability to purchase a particular good or service.
• B) drives competitors out of business in order to achieve a monopoly position in the market.
• C) creates a "common man" image to reach a larger market.
• D) establishes a high price in order to earn the highest possible profit while there is little competition.

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Definitions:

Excise Tax

A tax imposed on specific goods, services, or activities to raise revenue or discourage their use.

Revenue

The total income generated by a business or organization from its normal business operations.

Supply Curve

A graphical representation showing the relationship between the quantity of goods suppliers are willing to produce and the price of those goods.

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service.