A Skimming Pricing Policy

question 276

Multiple Choice

A skimming pricing policy

• A)should be used if a firm expects strong competition very soon.
• B)is most useful when demand is very elastic.
• C)is typically used during the sales decline stage of the product life cycle.
• D)often involves a slow reduction in price over time.
• E)means temporary price cuts to speed new products into a market.

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Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, measuring financial health.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Following Year

The year that comes after the current year, often in the context of planning or forecasting.

Pure Play Method

A valuation method that compares a company to others within the same industry or sector with a single focus or product line.