A Market-Penetration Pricing Policy Should LEAST Likely Be Used for a New

question 42

Multiple Choice

A market-penetration pricing policy should LEAST likely be used for a new product when ________.

• A) the market is highly price sensitive
• B) production and distribution costs fall as sales volume increases
• C) the product's quality and image support a high price
• D) a high price helps keep out the competition
• E) there are few or no competitors in the market

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Definitions:

Consumer Surplus

The divergence between the sum consumers are prepared to pay for a product or service and the sum that is actually paid.

Maximum Price

A price ceiling set by a government or regulatory body, above which a particular good or service cannot be sold, often to protect consumers.

Equilibrium Prices

The price at which the quantity of a good supplied is equal to the quantity demanded, leading to market balance.

Consumer Surplus

The difference in the total amount that customers are ready and financially able to invest in a good or service and the amount they truly pay.