A firm launches a new technological product at a high initial price to recover development costs from customers willing to pay more. Which pricing strategy is this?
Correct answer: C. Price skimming
- A. Penetration pricing
- B. Cost-plus pricing
- C. Price skimming
- D. Prestige pricing
Explanation
Price skimming sets a high initial price and often reduces it later as the product reaches more price-sensitive buyers. Penetration pricing follows the opposite approach by using a low initial price to gain market share quickly.
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