Which of the Following Observations About the Impact of Product

question 51

Multiple Choice

Which of the following observations about the impact of product considerations on pricing is true?

• A) A penetration policy should be used when the firm expects minimal competition for a product.
• B) A skimming policy provides best returns for perishable products as they approach being no longer fit for sale.
• C) A penetration policy is commonly used for products that are highly distinctive in customers' minds.
• D) A skimming policy is useful when the firm has a temporary monopoly and when demand for the product is price inelastic.

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Definitions:

Grapes

Edible berries, typically growing in clusters on a vine, used in making wine, eaten fresh, or dried to produce raisins.

Demand Function

A mathematical function showing the quantity of a good demanded at different prices.

Price Elasticity

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Yen

The official currency of Japan, known internationally by its symbol ¥.