Several factors indicate that a penetration pricing policy would be effective when introducing a new product, including situations in which
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) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.
E) many segments of the market are price-sensitive.

Question

Quizplus · Accepted Answer

Penetration pricing is effective when many segments of the market are price-sensitive, as it involves setting a low initial price to attract a large number of customers quickly.

Several Factors Indicate That a Penetration Pricing Policy Would Be