Which of the Following Is a Key Benefit of Penetration

question 135

Multiple Choice

Which of the following is a key benefit of penetration pricing?

• A) It increases traffic in retail stores by special sales on a limited number of products.
• B) Profitability is not dependent on the volume of sales.
• C) It tends to discourage competitors.
• D) Each individual sale typically yields a high profit.

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Definitions:

Effective Annual Rate

The actual annual return on an investment or the actual annual cost of a loan, including the effect of compounding interest, as opposed to the nominal rate.

Effective Annual Rate

The actual rate of interest on an investment or loan, taking into account the effect of compounding over a given period.

Compounded

A method of calculating interest where the earned interest on an investment is added to the principal, and future interest is calculated on the total amount.

Annuity

A fiscal product designed to emit a stable series of disbursements to an individual, chiefly intended as support for retired people's income.