A firm would likely pursue penetration pricing when
A) it expects zero competition.
B) economies of scale are nonexistent.
C) the elite market is substantial.
D) the whole demand curve is fairly elastic.
E) supply is limited.

Question

Quizplus · Accepted Answer

Penetration pricing is appropriate when the whole demand curve is fairly elastic, meaning that a lower price will significantly increase the quantity demanded. This strategy can be used to gain market share and increase sales volume. The other options do not necessarily indicate a need for penetration pricing.

A Firm Would Likely Pursue Penetration Pricing When