A Skimming Pricing Policy Is Likely to Be Most Effective

question 110

Multiple Choice

A skimming pricing policy is likely to be most effective when

• A)consumers perceive one product to be similar to other products on the market.
• B)a lower price will significantly lower fixed costs.
• C)competitors will be attracted to the market due to the potential for high sales revenues.
• D)consumers tend to be price-sensitive.
• E)the high initial price will not attract competitors.

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Definitions:

Federal Transfer Payments

Payments from the federal government to individuals, states, or other governmental entities without any requirement for repayment.

GDP

GDP, the cumulative market price of all ultimate goods and services produced within the confines of a country over an allotted timeframe.

Government

The system or group of people governing an organized community, often a state, including institutions and mechanisms that regulate and guide the community or society.

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the tax rate on the last dollar of income earned.