Penetration Pricing Means Charging a Relatively Low Price for a Product

question 120

Multiple Choice

Penetration pricing means charging a relatively low price for a product as a way to reach the mass market.The low price is designed to capture a large share of a substantial market.Thus,penetration pricing:

• A) tends to be more effective in a less price-sensitive market
• B) tempts competitors to enter the market
• C) provides a large profit per unit sold
• D) recoups product development costs quickly
• E) tends to lower production costs

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