Question

​_____ pricing means that the firm charges a​ high, premium price for its new product with the intention of reducing it in the future in response to market pressures.

Answer 1

Full question:

​_____ pricing means that the firm charges a​ high, premium price for its new product with the intention of reducing it in the future in response to market pressures.

A. Skimming

B. Captive

C. Promo

D. Value

Answer:

Skimming pricing means that the firm charges a​ high, premium price for its new product with the intention of reducing it in the future in response to market pressures.

Explanation:

Price skimming is a commodity pricing approach by which a firm prices the most expensive initial price that consumers will spend and then reduces it over time. As the request of the first customers is filled and the race begins the market, the firm reduces the price to pull another part of the population.  

Price skimming is usually practiced when a distinct type of product penetrates the market. The purpose is to collect as much income as feasible while consumer request is high and race has not joined the market.