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Lera25 [3.4K]
3 years ago
12

When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the _____

___ pricing strategy.market-penetrationcompetitivecost-plusmarket-skimmingmarket-segmentation
Business
2 answers:
bazaltina [42]3 years ago
8 0

Answer:

Market Skimming

Explanation:

Market skimming is a pricing technique whereby producers and organizations set high introductory prices in order to attract buyers with strong affinity for the products and who possess the resources to buy it, Then over time continue to gradually reduce to products so others in the market could afford it. It is also known as price skimming, involves setting high prices for a product just launched in the market. A highly selective market is where techniques like this thrives.

omeli [17]3 years ago
8 0

Answer:

The answer is Market-skimming

Explanation: Market Skimming refers to a pricing approach whereby the manufacturer of a product or service sets a high introductory price in order to attract buyers who have a strong desire for the product and who possess the resources needed to purchase the products or services, this pricing strategy is implemented with the intention that it will gradually be reduced in order to attract the next and subsequent layers of the market.

Examples of implementation of market skimming strategies include; Apple iPhone and other products, Sony PlayStation 5, etc.

Advantages of Market skimming include:

- Helps to build a high-quality image and perception of the product.

- Helps in cost recuperation, meaning that It helps a firm quickly recover its costs of development.

-High profitability, this means that it helps to generates a high profit margin for the company.

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When an economist makes a prediction that a rise in consumer incomes will increase the demand for bicycles sold by a bicycle company, it is made on assumption that bicycles are normal goods. Therefore, the option A holds true.

<h3>What is the significance of normal goods?</h3>

The normal goods or services being sold in the market of an economy can be referred to or considered as goods that have a direct relation with the demand for such goods, which are affected by consumer income.

As per the behavior of normal goods, it can be inferred that their demands increases with a given increase in the disposable income of the consumer, such as the one in the condition given above.

Therefore, the option A holds true and states regarding the significance of normal goods.

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