What Type of Demand for a Product Would Penetration Pricing

question 38

Multiple Choice

What type of demand for a product would penetration pricing work best for?

• A) elastic
• B) highly elastic
• C) inelastic
• D) highly inelastic

---

Definitions:

Capital Gains Yield

The price appreciation component of a stock's total return, calculated as the increase in the stock price divided by its initial price.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Financing Costs

Financing costs are expenses incurred by an entity in the process of borrowing funds, including interest payments and other related fees.