Which pricing strategy involves setting a high price initially to maximize profits from early adopters before gradually lowering the price?

The pricing strategy that sets a high price initially to maximize profits from early adopters is called "skimming pricing. " This approach targets customers who are willing to pay more for a new product, often because they want to be the first to have it. By starting with a high price, companies can quickly recover their development costs and gain significant profits from those early buyers. After some time, the price is gradually lowered to attract a wider audience who may not be willing to pay the higher price. For example, when a new smartphone is released, it might be priced high at first to capitalize on tech enthusiasts, and then the price drops as the product becomes more common and competition increases.