Several Factors Indicate That a Penetration Pricing Policy Would Most

Multiple Choice

Several factors indicate that a penetration pricing policy would most likely be effective when introducing a new product, including situations in which

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) customers interpret the high price as signifying high quality.
D) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.
E) many segments of the market are price-sensitive.