Asked by
marisela martinez
on Nov 02, 2024
Verified
Nick is planning on setting up a small-scale guitar manufacturing company.Nick isn't well versed in economics,so he doesn't understand the concept of supply and demand very well.What pricing strategy must Nick adopt?
A) Skimming pricing
B) Prestige pricing
C) Psychological pricing
D) Cost-based pricing
Cost-based Pricing
Cost-based pricing is a pricing strategy where the selling price of a product is determined by adding a profit margin to the cost of making or buying the product.
Skimming Pricing
A pricing strategy involving setting high prices at the launch of a new product to maximize profits from customers willing to pay more, before lowering the price over time.
Prestige Pricing
A pricing strategy where prices are set higher than normal because the product or service is perceived to have a prestigious status or high quality.
- Recognize approaches for penetrating markets characterized by intense competition.
- Learn about the differentiation between variable and fixed costs in the context of pricing decisions.
Verified Answer
MM
Learning Objectives
- Recognize approaches for penetrating markets characterized by intense competition.
- Learn about the differentiation between variable and fixed costs in the context of pricing decisions.