A Company Might Use Penetration Pricing When

question 11

Multiple Choice

A company might use penetration pricing when

• A) demand for a new product is price inelastic.
• B) a seller wants to charge a relatively high price on a new product.
• C) the firm expects competition to move in rapidly.
• D) economies of scale are not a consideration.

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Definitions:

Offeror

A person or entity who proposes a deal or contract to someone else, indicating their intention to enter into an agreement upon acceptance.

Consideration

Something of value that is exchanged between parties within a contract, which can be in the form of money, services, or promises, and is essential for the contract to be legally binding.

Ethical

Pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.

Implied-In-Law Contracts

Implied-in-law contracts, also known as quasi-contracts, are contracts recognized by a court despite there being no agreement between the parties, to prevent unjust enrichment.