Assume that a company has developed a new product, or a new version of an old...
Assume that a company has developed a new product, or a new version of an old product that is significantly different and improved. For a while the company is the only supplier or producer of this product. What should be the pricing strategy of the firm? What factors should be taken into consideration when determining the pricing strategy?
Homework Answers
Since there is only one supplier aur producer of this product it can be mentioned that it is a Monopoly in its own way and therefore the pricing strategy would be in such a way that it can follow skimmed pricing because it can initiallyset a very high price and decrease gradually so that all the consumer surplus can be captured all in all.
the factors that have to be considered in determining the pricing strategy of the product is nothing but the elasticity of the product, the amount of competitors, the type of good whether it is normal or inferior, the government policies and the brand reputation etc
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