A "Penetration Pricing Policy

question 100

Multiple Choice

A "penetration pricing policy":

• A) is the same as a "meeting competition" price-level policy.
• B) is wise when demand is fairly inelastic-offering an "elite" market.
• C) involves temporary price cuts to speed new products into market.
• D) involves a series of step-by-step price reductions along an inelastic demand curve.
• E) may be wise if a firm expects strong competition very soon after its product introduction.

---

Definitions:

Salaries and Wages Expense

The total cost incurred by an employer for employee compensation, including both salaries and hourly wages.

Temporary Account

An account that is closed at the end of each accounting period and its balances transferred to permanent accounts; examples include revenues, expenses, and dividends accounts.

Correct Entry

An accurate recording of a transaction in the books of accounts, adhering to accounting principles and conventions.

Correcting Entry

A journal entry made in accounting records to amend a previously made error.