Answer to Question 1
Market skimmingin the market skimming approach, pricing operators use a relatively high price to attract or skim a small segment of the market. This philosophy works best when there is a small percentage of a large potential market that can and will pay the higher prices; where the competition is unlikely to undercut the prices set for similar product offerings; and where customers perceive that the value given in the form of the restaurant experience is greater than the prices charged. Market penetrationon the other hand, market penetration involves setting prices as low as possible while still contributing to profits. This approach sets out to attract as large a market as possible. Ideally, lower prices will create a loyal following, which will translate into greater sales volume and long-term profitability. This philosophy works best when demand is price elastic; that is, when changes in price result in a greater change in demand, and when lower prices will deter competition from invading the market.
Answer to Question 2
B
Many types of edible fungi are grown for the market.
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