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Question
______ price refers to the high initial price charged when a new product is introduced in the market.
Options
Premium
Penetration
Skimming
None of these
Solution
Skimming price refers to the high initial price charged when a new product is introduced in the market.
Explanation:
Skimming pricing is a strategy where a high initial price is set for a new product to maximize profits from segments of the market willing to pay the premium price. Over time, the price is gradually reduced to attract more price-sensitive customers. This approach helps companies recover their development costs quickly and target consumers who perceive the product as valuable and are willing to pay more for it.
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