A Skimming Pricing Policy Is Likely to Be Most Effective

question 206

Multiple Choice

A skimming pricing policy is likely to be most effective when

• A)consumers tend to be price sensitive.
• B)it will be easier to set measurable sales unit goals.
• C)a lower price will significantly lower fixed costs.
• D)consumers perceive your product to be similar to other products on the market.
• E)customers are willing to buy immediately at the high initial price

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Definitions:

Bargain Purchase Option

An option in a lease agreement that allows the lessee to purchase the leased asset at a price significantly below its fair market value.

Capital Lease

A lease agreement that is classified as a purchase by the lessee for accounting purposes because it meets certain criteria, such as transfer of ownership by the end of the lease term.

Operating Lease

A lease agreement for property or equipment that is considered a rental and is not recorded as an asset on the company's balance sheet.

GAAP

Generally Accepted Accounting Principles, a collection of commonly followed accounting rules and standards for financial reporting in the United States.