Which of the Following Statements Is True of Penetration Pricing

question 25

Multiple Choice

Which of the following statements is true of penetration pricing?

• A) Penetration pricing makes sense only in categories that have a significant group of consumers who would be willing to pay a premium.
• B) Penetration pricing involves increasing product prices to target upscale consumers.
• C) A company using penetration pricing makes profit from the volume of sales.
• D) A company using penetration pricing gains a very high profit on each individual sale.

---

Definitions:

Beta

A measure of a stock's volatility in relation to the market; a beta greater than one suggests greater volatility than the market, while a beta less than one indicates less.

Annualized Return

The geometric average amount of money earned by an investment each year over a given time period, expressed as a percentage.

International Joint Venture

A business arrangement in which two or more parties from different countries form a partnership to share resources, risks, and rewards in pursuing a specific business venture.

Abnormal Return

The difference between the actual return of a security and the expected return based on risk and market performance.