Question

Cellphones with unique new technology are usually released in the market at a high price since there is no immediate competition for the product. Gradually, the prices are reduced to capture more customers and to compete with competitors who copy the new technology. This type of pricing strategy is known as a _____ policy.

Answer 1

Answer: Skimming price

Explanation:

Skimming pricing or skimming price policy is defined as the scheme through which marketer of any particular product or service sets a high price at initial stage and then tends it to decrease it accordingly. It can also be remarked with the price discrimination technique which is used for gaining more money and benefit

According to the situation mentioned in the question,cellphones are being sold at high price because no other company has similar technology phones, thus the customers will pay high price for buying it .After a gradual time when similar technology phones are introduced in market, price of that particular phone decreases.