Herald Inc. is a leading producer of software technology and cloud computing devices. In an attempt to further its goal of innovation, Herald introduces a technologically advanced one-of-a-kind user interface at a relatively high price. By doing so, Herald seeks temporary monopoly until competitors move in. This is a typical example of a(n) _____ policy.
A) penetration
B) odd-even
C) skimming
D) going-rate

Question

Quizplus · Accepted Answer

The described policy is skimming, which is the practice of offering a product or service at a high price for a limited time in order to maximize profits and establish a temporary monopoly before competitors enter the market. Penetration pricing is when a product or service is offered at a low price in order to quickly gain market share. Odd-even pricing is when products or services are priced at odd numbers to make the price seem lower or even numbers to give the impression of quality. Going-rate pricing is when a product or service is priced according to the prevailing market rate.