A skimming strategy will work best for a retailer when:
A) competition is high because it "skims" right above the retailer's costs.
B) revenues are equal to expenses.
C) the retailer has a temporary monopoly with its product line.
D) the retailer has excess capacity in its building.
E) demand is less than supply.

Question

Quizplus · Accepted Answer

A skimming strategy is most effective when a retailer has a temporary monopoly with its product line, allowing them to charge a higher price due to limited competition. This allows the retailer to "skim" profits before competition enters the market. In scenarios where competition is already high or demand is low, a skimming strategy may not be as effective.

A Skimming Strategy Will Work Best for a Retailer When