​Lang Industries Is Introducing a New Product and Will Use

question 127

Multiple Choice

​Lang Industries is introducing a new product and will use price skimming to set the price.Price skimming is

• A) ​the strategy of charging the highest possible price for a product during the introduction stage of its life-cycle.
• B) ​a way for the seller to secretly pocket extra money charged for a product but not recorded on the company books.
• C) ​raising prices above a fair price.
• D) ​a means of increasing competition in order to raise prices even higher.

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Definitions:

Minimum-Wage Laws

A legal framework that specifies the minimum hourly earnings employers are obliged to pay their staff.

Lowest Wage

The minimum amount of compensation an employer is legally allowed to pay to workers, also known as minimum wage.

Free Market

An economic system where prices for goods and services are determined by the open market and by consumers, with minimal government intervention.

Market Price

Today's rate at which one can sell or buy a service or asset.