The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) ____ strategy in pricing these components.
A)odd-even
B)skimming
C)lining
D)penetration
E)psychological

Question

Quizplus · Accepted Answer

The scenario describes Allied Electronics having difficulty raising the price, indicating that they had initially used a penetration pricing strategy, which involves initially setting a low price to gain market share. This was done to introduce a new product into the market, but it appears that Allied did not consider the potential for increased costs when setting the initial price.

The Management at Allied Electronics Is Having Difficulty in Raising