Description
20. With ________ pricing, a company tries to cover its initial costs by setting the highest price that keenly interested customers will pay.
a. skimming
b. penetration
c. flexible
d. bidding
Explanation & Answer
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I believe that this would be "skimming" pricing. Setting skimming prices is what a company will do when they want to start with a higher price to cover their costs and then slowly move further down after they meet the needs of more interested and higher-paying customers.
With penetration pricing, a company tries to push through a product with a low price to penetrate to the core group of buyers.
Bidding pricing would be not setting a price, but rather letting the price be bid up - so while it might be high level, it wouldn't be setting a price necessarily - and certainly wouldn't be setting a high price, but rather waiting for one.
And flexible pricing is when pricing can shift and adapt to match supply and demand.
Please let me know if you need anything else and I hoped this helped! Remember to always look over your study materials when looking for specific information!
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