What is the term for pricing a new product at a low initial price to build market share quickly?
A)penetration pricing
B)predatory pricing
C)price skimming
D)target costing

Question

Quizplus · Accepted Answer

Penetration pricing is a pricing strategy where a new product is introduced at a low price to quickly gain market share. This low price helps to attract customers and encourages them to try the product. Once the product gains popularity and market share, the price can be increased gradually. Predatory pricing involves setting low prices with the intention of driving competitors out of the market, whereas price skimming involves setting high prices for a new product to take advantage of the initial demand. Target costing is a cost management strategy used to determine the maximum cost that can be incurred for a product, taking into account the price at which it will be sold and the desired profit margin.

What Is the Term for Pricing a New Product at a Low