An innovative tech firm launches a patented unique software with no immediate competition and high development costs. Market data shows a 5% increase in price leads to an 8% decrease in demand. The firm wishes to use the software to lock customers into long-term hardware maintenance contracts. Which pricing strategy is most appropriate?

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Economics · Pricing Strategies

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

Complementary product pricing, to encourage long-term hardware maintenance contract sales.

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Answer 1

Penetration pricing, because the demand for the software is highly inelastic.

Answer 2

Price skimming, because the product is unique and demand is highly price insensitive.

Answer 3

Complementary product pricing, to encourage long-term hardware maintenance contract sales.

Answer 4

Price discrimination, to charge higher prices to hardware owners than to non-owners.

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