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23 August, 07:08

The strategy of setting a high initial price in order to (i) take advantage of demand for a new product by a certain type of customer, who is willing to pay a premium, and (ii) cover the generally high costs of introducing a new product, is called:

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  1. 23 August, 07:27
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    Price skimming

    Explanation:

    When a company establishes a price skimming strategy for the introduction of a new product, it will charge the highest possible price to early adopters of the product. Then as the product's demand starts to grow, it will gradually skim or lower the price of the product as more competitors enter the market.
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