Penetration Pricing/Price Skimming

Question 1

Penetration Pricing

Answer 1

Lowering prices as much as possible close to your variable costs of producing that product, so you can reach as many people as you can (sales-oriented)

Question 2

Price Skimming

Answer 2

Trying to set the price high compared to variable costs to ensure you recuperate your fixed costs as fast as possible (profit-oriented)