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.