Epic Electronics is considering a strategy to charge a very high introductory price for their automobile video theater. After identifying that their rival firms did not carry this new product, they chose this pricing strategy to achieve maximum profits. Epic Electronics has chosen a ________ strategy.

Epic Electronics has chosen a ''skimming pricing'' strategy. This is a marketing strategy where a firm charges the highest initial price that customers will pay for a new or innovative product. Since the firm has determined that their rivals do not carry this product, they have the opportunity to temporarily monopolize the market for automobile video theaters. By setting a high price, they can maximize profits from early adopters who are willing to pay a premium to access the product first. Over time, as the product becomes more widespread and competition increases, the company may lower the price to attract more price-sensitive customers.

Extra: The concept behind a skimming pricing strategy is to "skim" off consumers' surplus from the market. It's often used for new technologies or products, where some segments of the market value the innovation highly enough to pay a higher price to have it early. By capitalizing on this, a company can recoup its development costs more quickly.