A Penetration Pricing Policy Is Most Likely to Be Effective

Multiple Choice

A penetration pricing policy is most likely to be effective when which of these is true?

A) Lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B) The high initial price will not attract competitors.
C) A low initial price discourages competitors from entering the market.
D) Customers interpret the high price as signifying high quality.
E) Enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.