Several Factors Indicate That a Penetration Pricing Policy Would Most

question 295

Multiple Choice

Several factors indicate that a penetration pricing policy would most likely be effective when introducing a new product, including situations in which

• A) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
• B) the high initial price will not attract competitors.
• C) customers interpret the high price as signifying high quality.
• D) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.
• E) many segments of the market are price-sensitive.

---

Definitions:

Discharged

Refers to being released or freed from a contractual or legal obligation or liability.

Willful Conduct

This term describes actions taken intentionally, with knowledge that the behavior is wrongful or likely to cause a certain outcome.

Chapter 11

A provision of the United States Bankruptcy Code that permits businesses to reorganize their debts while continuing to operate.

Financial Institutions

Organizations that provide financial services, such as banks, insurance companies, and investment firms.