A product that represents clear technological advance over competing products can a generally command a high price. Because technological advances tend to be quickly surpassed and companies want to make large profits while they still can, many companies charge the greatest price the market will bear when they have such a product. But large profits on the new product will give competitors a strong incentive to quickly match the new product's capabilities. It follows from the above passage that to maximize overall profit from a new technologically superior product the best strategy would be to--

A charge less than the greatest possible price.

B Charge the highest possible price that the market has to offer.

C Charge less than the competitors lower quality product.

D Not to develop products which are technologically superior in comparison to the competitors product?

Solution

Correct Answer: Option B

Solution

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