A cell phone company introduced its brand-new 5G phone into the market. The phone featured global network capability, the fastest processor on the market, and the clearest connection quality. The phone also came with preloaded customized apps. The company chose to use skim pricing at the rollout and charged top dollar for its first customer. Because of its pricing choice, what could be predicted about the customer demand for the phone? A. demand remains steady B. demand decreases C. demand increases

Question

Hernandez

Business

18 March, 02:38

A cell phone company introduced its brand-new 5G phone into the market. The phone featured global network capability, the fastest processor on the market, and the clearest connection quality. The phone also came with preloaded customized apps. The company chose to use skim pricing at the rollout and charged top dollar for its first customer. Because of its pricing choice, what could be predicted about the customer demand for the phone? A. demand remains steady B. demand decreases C. demand increases

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Answers (1)

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Salvador · Answer 1

The correct answer is letter "B": demand decreases.

Explanation:

Price skimming is a strategy that unveils a product at the highest price customers will pay for it. It aims for high profits to quickly recover development costs. The initial high price is a sign of high quality for the product, though, the price lowers as demand falls to attract more price-conscious consumers.