A Penetration Pricing Policy Is Most Likely to Be Effective

question 322

Multiple Choice

A penetration pricing policy is most likely to be effective when

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

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Definitions:

Methane Gas

A colorless, odorless flammable gas that is the simplest alkane, consisting of one carbon atom and four hydrogen atoms, widely used as a fuel.

Complete Combustion

A chemical reaction in which a compound reacts with an oxygen-rich environment to produce a complete oxidation, releasing maximum energy.

Ethanol

A volatile, flammable, colorless liquid, commonly known as alcohol, used in beverages and as a solvent or fuel.

Complete Combustion

A chemical process in which a compound, usually a hydrocarbon, reacts fully with an abundant supply of oxygen to produce carbon dioxide, water, and energy.