Match the items of List-I with the items of List-II. List-IList-II (a) A market having high price…
Matching market elasticity conditions with pricing strategies: (a) A market with high price elasticity requires a low initial price to capture volume, i.e., III. Penetrating…
Choose your answer
Match the items of List-I with the items of List-II.
| List-I | List-II |
|---|---|
| (a) A market having high price elasticity. | I. Skimming pricing |
| (b) A market having high price inelasticity | II. Differential pricing |
| (c) A market having several segments differing prominently with regard to price elasticities of their demand. | III. Penetrating pricing |
Codes : I II III
(A) (b), (c), (a)
Answer and explanation
Correct answer A
Matching market elasticity conditions with pricing strategies: (a) A market with high price elasticity requires a low initial price to capture volume, i.e., III. Penetrating pricing; (b) A market with high price inelasticity permits charging a high initial price, i.e., I. Skimming pricing; and (c) A market with segments differing in price elasticities suits II. Differential pricing (price discrimination). Thus, 'I-(b), II-(c), III-(a)' is correct.
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UGC NET Commerce