Price Skimming is a common pricing strategy used for new products. Employing price skimming involves setting a high initial price, which helps a business recover the costs associated with developing and marketing the product. Although price skimming can be used in a variety of industries, it's commonly seen in consumer electronics, including: smartphones, video game consoles, and tablet computers.
Learn more about price skimming, and the conditions that need to exist for this pricing strategy to be effective, in this video.
Go Premium for only $9.99 a year and access exclusive ad-free videos from Alanis Business Academy: http://bit.ly/1Iervwb
View additional videos from Alanis Business Academy and interact with us on our social media pages:
YouTube Channel: http://bit.ly/1kkvZoO
I'm confused, Can a product be price elastic even if it is a new product in a market and the only such product in its category, such that consumers do not want to purchase it at it's initial high price skimming price? If so, could you please give an example?
IMO, price elasticity is subjective to the purchasing customers and thus, the situation you mentioned is still possible even if it's a monopoly. A product can appeal to different customer segments, and depending on their economic backgrounds, one can be relatively more price sensitive than the other.
Price sensitivity (and hence, price elasticity) is also affected by other factors such as the product being a consumer staple vs. discretionary, price level (imagine the percentage of your income spent on the product), or economic utility of the product and how the pricing is being justified by that.
Work out if you need to pay.
When you know your gain you need to work out if you need to report and pay Capital Gains Tax.
You may be able to work out how much tax to pay on your shares.
the same type, acquired in the same company on the same date sold at the same time.
sold other shares in the tax year sold other chargeable assets in the tax year, such as a property you let out claim any reliefs are a company, agent, trustee or personal representative.
Reporting a loss.
The rules are different if you need to report a loss.
Fifth most actively traded share.
Market capital of DKK 206 bn.
Shareholders by geography.
Rest of Europe etc.
Ratings from equity analysts covering the Danske Bank share and consensus earnings estimates.
Selling in special circumstances.
shares you bought at different times and prices in one company shares through an investment club shares after a company merger or takeover employee share scheme shares.
Jointly owned shares and investments.
If you sell shares or investments that you own jointly with other people, work out the gain for the portion that you own, instead of the whole value. There are different rules for investment clubs.
What to do next.