All of the Following Are Situations in Which a Penetration

question 51

Multiple Choice

All of the following are situations in which a penetration pricing strategy would be appropriate EXCEPT:

• A) Sales volume of the service is very sensitive to price
• B) Economies in unit costs can be achieved by operating at large volumes
• C) A service faces threats of strong potential competition very soon after introduction
• D) There is no class of buyers willing to pay a higher price to obtain the service
• E) The service is a major improvement over past services

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Definitions:

Debt-to-Income Ratio

A financial measure that compares an individual's total debt to their total gross income, often used by lenders to assess borrowing risk.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Real Growth Rate

The rate at which an economy's gross domestic product (GDP) grows after adjusting for inflation, indicating the actual growth of economic output.

Budget Deficit

A financial situation where a government's expenditures exceed its revenues within a specific period, leading to borrowing or debt accumulation.