The Manufacturer of a New Kind of Fat-Free Ice Cream

question 201

Multiple Choice

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue against using a penetration pricing strategy for the tasty fat-free ice cream?

• A)The ice cream market is highly elastic.
• B)A large portion of the market has inelastic demand for ice cream-over a fairly broad range of prices.
• C)Economies of scale in production would be substantial.
• D)Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category.
• E)Once the initial price is set,it is nearly impossible to lower the price without alienating early buyers.

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Definitions:

Repeating Items

The act of presenting the same items or information multiple times to reinforce memory or learning.

Eyewitness Testimony

Evidence provided by individuals who were present during an event, often used in court, which can be highly influential but sometimes unreliable due to memory inaccuracies.

False Positive

An error in data reporting in which a test result improperly indicates presence of a condition (such as a disease) when it is not actually present.

Active System

Refers to systems or components in technology or biology that require energy input to operate and actively control or effect changes.