A Skimming Pricing Policy Is Likely to Be Most Effective

question 21

Multiple Choice

A skimming pricing policy is likely to be most effective when

• A)consumers perceive your product to be similar to other products on the market.
• B)a lower price will significantly lower fixed costs.
• C)customers interpret the high price as signifying high quality.
• D)consumers tend to be price-sensitive.
• E)it is easier to set measurable sales unit goals.

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Definitions:

Foreign Exchange Risk

The possibility of losing value due to fluctuations in currency exchange rates affecting international financial transactions.

Exchange Rates

The price of one currency in terms of another for conversion purposes.

Canadian Dollars

The official currency of Canada, often symbolized as CAD, which is used for all financial transactions within the country.

Accounts Receivable

Accounts receivable is the money owed to a business by its clients or customers for goods or services that have been delivered or used but not yet paid for.