The type of price policy that tries to sell the top of the demand curve utilizing a high price, before aiming at more price-sensitive consumers, is called
A. skimming pricing
B. flexible pricing
C. one-price policy
D. penetration pricing
E. odd/even pricing
Answer: (A) With the introduction of every new product, there is a group of consumers willing to pay premium prices to try it. This provides an opportunity to launch the product at higher prices before competition forces the prices down. The skimming policy attempts to "skim the cream" off of the top of the market, thus recouping research and development costs early on prior to reducing the price for the rest of the market. Flexible pricing (B) refers to offering different prices to different customers, and is incorrect. One-price policies (C) are policies that offer products to the customers for the same price. Penetration pricing (D) refers to offering the product to the market with an initial low price, and is the opposite of skimming. Odd/ even pricing (E) is a form of psychological pricing, setting prices with odd or even endings depending on consumer perception, and is an incorrect response.