Scenario 4-2. Petro is considering opening a new small business called Petro's Playground. It will be an inside playground with climbing equipment, jungle gym, pit of balls, slides, and swings. Petro's closest competition has been in business for four years and provides quality service along with the fun of the playground. The competition is located four miles away in a large city and Petro is hoping to acquire some of his competition's market share by providing lower prices and more diversity in playground equipment.
-In Scenario 4-2, Petro plans on keeping his prices ______.
A) always lower than the competition
B) the same as the competition
C) at a rate where gross margin will allow a profit
D) always higher than the competition

Question

Quizplus · Accepted Answer

Petro plans on keeping his prices at a rate where the gross margin will allow a profit, as this is a sustainable business strategy.