The Manufacturer of a New Kind of Fat-Free Ice Cream

question 216

Multiple Choice

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product. Which of the following conditions would argue against using a penetration pricing strategy for the tasty, fat-free ice cream?

• A) The ice cream market is highly elastic.
• B) A large portion of the market has inelastic demand for ice cream over a broad range of prices.
• C) Economies of scale in production would be substantial.
• D) Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category.
• E) Once the initial price is set, it is nearly impossible to lower prices without alienating buyers.

---

Definitions:

Inflammation

The body's protective response to injury, infection, or irritation, characterized by redness, warmth, swelling, and pain.

Esotropia

A condition where one or both eyes turn inward, commonly referred to as "cross-eyed."

Abnormally Inward Gaze

A condition where one or both eyes are turned inward, often referred to as cross-eyed or esotropia.

Choroid

The vascular coat of the eye between the sclera and the retina.