If a firm's objective is maximum market skimming,it will initially set a high price on new products.

Question

Quizplus · Accepted Answer

Market skimming is a pricing strategy where a company sets a high price for a new product when it is first introduced in the market. This is done to maximize profits by targeting the early adopters who are willing to pay a premium for the product. As the demand for the product decreases over time, the price is gradually lowered to expand the customer base. Therefore, if a firm's objective is maximum market skimming, it will initially set a high price on new products.

If a Firm's Objective Is Maximum Market Skimming,it Will Initially