How is a skimming policy different from a penetration policy?
A)A skimming policy is used when demand for a product is price inelastic,while a penetration policy is used when demand for a product is price elastic.
B)A skimming policy is used when a seller wants to charge a relatively low price on a new product,while a penetration policy is used when a seller wants to charge a relatively high price on a new product.
C)A skimming policy is used to obtain large economies of scale and for the rapid creation of a mass market,while a penetration policy is used to capitalize on a temporary monopoly.
D)A skimming policy is used to discourage competition,while a penetration policy is used to obtain maximum revenue from the market before substitute products are created.

Question

Quizplus · Accepted Answer

A skimming policy is used when demand for a product is price inelastic, meaning customers are willing to pay a higher price for the product, while a penetration policy is used when demand for a product is price elastic, meaning customers are more price-sensitive and will only buy the product at a lower price. Skimming is typically used for high-end or luxury products, while penetration is used for mass-market or low-cost products.

How Is a Skimming Policy Different from a Penetration Policy