When Pricing New Products, One Strategy That Can Be Used

question 82

True/False

When pricing new products, one strategy that can be used is price skimming where the initial product price is set low and in doing this management hope the product will be widely accepted in the long term.

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Definitions:

Capital Equipment

Long-lasting tools, machinery, or infrastructure used in the production of goods and services.

Fertile Land

Soil or land that is rich in nutrients, making it highly productive for agriculture.

Scarcity

A situation in which available resources are insufficient to satisfy all wants and demands.

Recessions

Periods of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in successive quarters.