Penetration Pricing Policy Is MOST LIKELY to Be Effective When

Multiple Choice

penetration pricing policy is MOST LIKELY to be effective when: (1) __________; (2) unit production and marketing costs fall dramatically as production volume increases; and (3) many segments of the market are price sensitive.

A) lowering the price has only a minor effect on increasing sales volume and reducing unit costs
B) the high initial prices do not attract competitors
C) customers interpret high prices as signifying high quality
D) customers are willing to buy immediately at the high initial price
E) a low initial price discourages competitors from entering the market