When a firm introduces a new product at a relatively low price it is designed to capture a large share of a substantial market and produce lower production costs because it hopes to reach the mass market.It is following which of these type of strategies?
A)penetration pricing
B)price-insensitive demand
C)price skimming
D)cost bundling

Question

Quizplus · Accepted Answer

Penetration pricing is a strategy used by firms to introduce a new product at a relatively low price to capture a large share of the market. The objective of this strategy is to quickly gain market share and generate economies of scale, which will eventually result in lower production costs. This strategy is typically used when the market is price-sensitive and there is a substantial market for the product. Therefore, A) Penetration pricing is the best choice in this scenario.

When a Firm Introduces a New Product at a Relatively