A skimming price policy tries to sell the top of the demand curve at a high price before aiming at more price-sensitive customers.
What is a price skimming?
- Price skimming is a method of product pricing in which a company sets its starting price as high as its target market would bear before gradually lowering it.
- The company reduces the price to appeal to a different, more price-sensitive portion of the population as the demand of the initial clients is met and competition enters the market.
- The penetration pricing model, in contrast, emphasizes the release of a product at a lower price in order to capture as much market share as feasible.
When a new kind of product enters the market, price skimming is frequently employed. The objective is to maximize profits while there is strong consumer demand and co
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