A Penetration Pricing Policy Is Most Likely to Be Effective

question 244

Multiple Choice

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) __________; and (3) unit production and marketing costs fall dramatically as production volumes increase.

• 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)a low initial price discourages competitors from entering the market
• E)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable

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Definitions:

Uric Acid

A waste product formed from the breakdown of purines, which are found in many foods, and is excreted in urine.

Nephridial Organs

Excretory organs found in many invertebrates, functioning similarly to kidneys in removing metabolic wastes from the organism’s body.

Metanephridia

Excretory organs in many invertebrates, such as annelids, that filter body fluid directly from the coelom.

Flatworms

A group of simple, soft-bodied invertebrate animals that include planarians, tapeworms, and flukes, known for their flat bodies.