When a Firm Introduces a New Product at a Relatively

question 141

Multiple Choice

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,which type of strategy is it following? (The low price is designed to capture a large share of a substantial market and produce lower production costs. )

• A) price elasticity
• B) penetration pricing
• C) price skimming
• D) cost bundling

---

Definitions:

Indifference Curve

A graph representing combinations of two goods or services among which a consumer is indifferent, showing preference levels.

Optimal Consumption

The mix of goods and services that maximizes consumer utility or satisfaction given their budget constraints.

Indifference Curve

A graph showing different combinations of two goods among which a consumer is indifferent.

Increase in Income

A situation where an individual or entity experiences a rise in their earnings or revenue over a period.