Question $31$

Pine River Equipment has developed a distinctly new product that offers considerable promise. By exploiting the experience effect, management believes that there are opportunities for a substantial reduction in production costs as volume expands. While the market is quite large, there is a strong threat of imminent competition. The firm should likely use:

product differentiation.

a skimming appr$$ach to pricing.

a penetration approach to pricing.

a bid price policy.

a life cycle costing pricing policy.