A firm is using ________ when it charges a premium price for a new product with the intention of reducing the price in the future.
A)trial pricing
B)penetration pricing
C)price-quality inference pricing
D)prestige pricing
E)a skimming price

Question

Quizplus · Accepted Answer

This is an example of skimming pricing, where the firm sets a high price initially for a new product with the intention of gradually reducing it over time. The goal is to maximize profits by targeting early adopters and price-sensitive consumers before eventually attracting a broader audience as the price becomes more affordable.

A Firm Is Using ________ When It Charges a Premium