When might a firm use a price-skimming strategy? When might it ...

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When might a firm use a price-skimming strategy? When might it use penetration pricing? Describe each strategy.

Question 2

An economic system in which individuals and businesses make the decisions about what to produce and what to buy, and the market determines how much is sold and at what prices, is called a ____ economy.
 A) product
  B) producer's
  C) market
  D) planned
  E) command

[bbburns21]

Answer to Question 1

Price skimming is the strategy of charging the highest possible price for a product during the introduction stage of its life-cycle. If a company introduces a new, innovative product and wants to skim the cream off the market or when a high price would hold down demand which may be limited in the introduction stage, a company may use price skimming.

Answer to Question 2

C

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Thanks for the timely response, appreciate it

[olderstudent]

Wow, this really help