Final answer:
A skimming strategy is used by firms to market products at high prices to innovators, leveraging the temporary competitive advantage and earning higher profits. This strategy is common in the technology industry where new innovations attract consumers willing to pay a premium to have the latest advancements.
Step-by-step explanation:
The concept you are referring to is called skimming strategy, which is a pricing and marketing technique. A skimming strategy is used to market products to innovators and early adopters who are willing to pay premium prices for the latest technology and product enhancements. A classic example is the launch of new electronic devices where early versions of the product are sold at higher prices, catering to consumers who desire to be at the forefront of technology. This strategy leverages the temporary competitive advantage of innovation before other competitors can catch up, allowing the innovating company to earn above-normal profits. Over time, as the technology becomes more widely adopted and competition increases, prices typically decrease.