One Disadvantage of Using a Penetration Pricing Policy Is That

question 93

True/False

One disadvantage of using a penetration pricing policy is that the high unit profit margins will attract potential competitors into production of similar products.

---

Definitions:

Horizon Problem

A situation where the time horizon for decision making by managers is shorter than the long-term interest of the company, often due to differing objectives.

Positive Synergies

The beneficial effects or outcomes that result from the cooperation or merger of two or more entities or processes.

Contracting Efficiencies

Improvements in performance or cost savings achieved through outsourcing or entering into contracts for services.