Question

In the context of product considerations in pricing, _____ is an approach to pricing in which a seller charges a relatively high price on a new product and is used when demand for the product is price inelastic.A) skimming policy

B) penetration policy
C) markdown policy
D) going rate policy

Answer 1

The answer is A.

Step-by-step explanation:

Price skimming policy is a marketing strategy that a business or producer charges high price for its new product and after sometime lower the price to accommodate more consumers.

This type of product are usually luxury goods e.g Iphones. Consumers or buyers are not sensitive to price( i.e the product is price inelastic).

Consumers in this category believes that buying these products is a sign of affluence or being wealthy.

The life-cycle of this product are usually not long.