For a Market Penetration-Price Strategy to Succeed, Which of the Following

question 138

Multiple Choice

For a market penetration-price strategy to succeed, which of the following is LEAST likely to be true?

• A) Production costs decrease as sales volume increases.
• B) A low price triggers market growth.
• C) Distribution costs decrease as sales volume increases.
• D) Low prices must inhibit competition from entering the market.
• E) The strategy can be changed quickly, to a higher-priced position, with no negative impact.

---

Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, intended to prevent prices from reaching levels thought to be unfair or unaffordable.

Government

The organization, apparatus, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it.

Equilibrium Market Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, leading to a state of market balance.

Price Floor

A government- or authority-imposed minimum price below which a certain product cannot be sold, typically above the equilibrium price to ensure producers receive a minimum income.