If a market penetration pricing strategy results in lower per-unit cost,competitors will be discouraged from entering the market because
A) selective consumer demand will increase gross profit margins.
B) a high / low cost-based pricing strategy will not work.
C) they would likely need to quickly produce a large volume in order to compete.
D) profits would increase too rapidly.
E) they will only be able to advertise in the same media as the firm using the market penetration strategy.

Question

Quizplus · Accepted Answer

If a market penetration pricing strategy results in lower per-unit cost, competitors would likely need to quickly produce a large volume in order to compete. However, this may not be feasible for new entrants or small players in the market. As such, this can discourage competitors from entering the market.

If a Market Penetration Pricing Strategy Results in Lower Per-Unit