When Apple Computer Company Introduced the IPhone-A Combination Phone, MP3

question 142

Multiple Choice

When Apple Computer company introduced the iPhone-a combination phone, MP3 player, and Internet access device-in 2007, it was priced at $499, considerably higher than either the iPod or competing cell phones. Apple was probably pursuing a __________ pricing strategy.

• A) market penetration
• B) slotting allowance
• C) price fixing
• D) reference price
• E) skimming

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Definitions:

Midpoint Method

A technique used to calculate the percentage change between two values, offering a more precise method than simple percentage calculations.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often used to understand the sensitivity of demand in relation to price changes.

Midpoint Method

A technique used in economics to calculate the percentage change in variables, offering a more precise measure of elasticity between two points.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price.