A Penetration Pricing Policy Is MOST LIKELY to Be Effective

question 300

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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The total amount of funds available for borrowing in the financial markets, determined by saving behaviors and the influence of interest rates.

Theory Of Profits

A theoretical perspective on economics that examines how profit is generated and distributed in market economies.

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The benefits that innovators receive for developing new products or processes, typically in the form of profits, patents, or recognition.

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