A "Skimming Pricing Policy

question 172

Multiple Choice

A "skimming pricing policy":

• A) should be used if a firm expects strong competition very soon.
• B) is most useful when demand is very elastic.
• C) is typically used during the sales decline stage of the product life cycle.
• D) usually involves a slow reduction in price over time.
• E) means temporary price cuts to speed new products into a market.

---

Definitions:

Overhead Expenses

Costs associated with running a business that are not directly tied to producing goods or services, such as rent and utilities.

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operations.

Markdown

A reduction from the original or retail price of goods or services, typically to stimulate sales or clear out inventory.

Invoice

A paper provided by the vendor to the purchaser detailing the goods or services rendered and the total charge.