A Skimming Pricing Policy Is Likely to Be Most Effective

question 233

Multiple Choice

A skimming pricing policy is likely to be most effective when: (1) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2) the high initial price will not attract competitors; (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost;and (4) __________.

• A)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
• B)consumers tend to be price sensitive
• C)customers interpret the high price as signifying high quality
• D)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
• E)consumers perceive your product to be similar to other products on the market

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Definitions:

Residential Mortgage Loans

Loans borrowed by individuals for the purpose of purchasing residential properties, secured by the property itself.

Restrictive Covenants

Clauses in a contract or deed that limit how a piece of property can be used, to protect the value of adjacent properties or enforce a particular standard.

Eminent Domain

The authority of a government to take private property for public purposes, providing payment to the property owner.

Zoning

The regulatory process of dividing land into areas with specific uses, such as residential, commercial, or industrial, to control urban development.