Question

Xerox pioneered the first portable fax machine. In 1980, the price was $12,700. Xerox used a(n) __________ pricing strategy to help recover its research and development costs.
A. penetration
B. cost-plus
C. skimming
D. target ROI
E. above-market

Answer 1

Answer:

C. skimming

Explanation:

Based on the information provided it is safe to say that by setting the price at $12,700 Xerox used a skimming pricing strategy. This is a pricing strategy in which the firm/company places their new product in the market with the highest price they can give it and go slowly lowering the price as time goes on. This is mostly done with brand new, one of a kind products that do not have competition, like the portable fax machine that Xerox designed.