Penetration pricing means charging a relatively low price for a product as a way to reach the mass market. The low price is designed to capture a large share of a substantial market. Thus, penetration pricing tends to do which of the following?
A)to be more effective in a less price-sensitive market
B)to tempt competitors to enter the market
C)to recoup product development costs quickly
D)to lower production costs

Question

Quizplus · Accepted Answer

Penetration pricing can lead to lower production costs due to economies of scale as the company sells more units and spreads fixed costs over a larger number of units.

Penetration Pricing Means Charging a Relatively Low Price for a Product