All of the Following Are True About a Skimming Pricing

question 286

Multiple Choice

All of the following are true about a skimming pricing strategy when used during the introduction stage of the product life cycle except

• A)it capitalizes on the price insensitivity of early buyers.
• B)its profit margins may be high.
• C)it encourages "me too" entrants into the market.
• D)it recovers the R&D costs of the new offering.
• E)it helps build unit volume.

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Definitions:

Interval Estimate

An estimate of a population parameter that gives an interval believed to contain the parameter.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution without violating any constraints.

T Distribution

A probability distribution used in statistical analysis that is applicable when the sample size is small and the population variance is unknown.

Probability Distributions

Describes the likelihood of various outcomes in an experiment or process, represented as functions or tables.