When Apple Computer Company introduced the iPhone-a combination phone,MP3 player,and Internet access device-in 2007,it was priced at $499,considerably higher than either the iPod or competing cell phones.Hoping to attract innovators and early adopters,Apple was most likely pursuing a __________ pricing strategy.
A) market penetration
B) slotting allowance
C) price fixing
D) reference price
E) price skimming

Question

Quizplus · Accepted Answer

Apple was most likely pursuing a price skimming strategy, which involves charging a high price for a new product or service when it is first introduced, in order to recoup research and development costs and to capture early adopters who are willing to pay a premium. This strategy is often used for innovative products with limited competition, which could describe the iPhone when it was first introduced.

When Apple Computer Company Introduced the IPhone-A Combination Phone,MP3 Player,and