A Penetration Pricing Policy Is Most Likely to Be Effective

question 131

Multiple Choice

A penetration pricing policy is most likely to be effective when

• A)unit production and marketing costs fall dramatically as production volumes increase.
• B)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.
• C)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
• D)the high initial price will not attract competitors.
• E)customers interpret the high price as signifying high quality.

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Definitions:

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A semicircular area (with the flat side down) in a wall over a door, niche, or window; also, a painting or relief with a semicircular frame.

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