If firms wish to maximize their market share, they should opt for market-skimming pricing.

Question

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Market-skimming pricing involves setting a high price initially for a new product or service to capture early adopters or those willing to pay a premium. This strategy is effective for maximizing profits but may limit market share. To maximize market share, firms should opt for market-penetration pricing, which involves setting a low price to attract a large customer base and gain a foothold in the market.

If Firms Wish to Maximize Their Market Share, They Should