A firm believes it can reduce costs by increasing its market share (due to high bargaining power and opportunities for mechanization and automation). It should use ___ pricing.
A) flexible
B) customary
C) skimming
D) penetration

Question

Quizplus · Accepted Answer

Penetration pricing is a strategy where a firm sets a low price for a new product or service to attract customers and gain market share quickly. Once the firm has achieved a significant market share, it may have the bargaining power and scale to reduce costs through mechanization, automation, and more favorable terms from suppliers, aligning with the firm's belief mentioned in the scenario.

A Firm Believes It Can Reduce Costs by Increasing Its