In the context of product considerations in pricing,a _____ is an approach to pricing in which a seller charges a relatively low price on a new product and is used when demand for the product is,at least in the short run,price elastic.
A)going rate policy
B)markdown policy
C)penetration policy
D)skimming policy

Question

Quizplus · Accepted Answer

Penetration policy is the pricing strategy in which the seller charges a lower price on its new product to gain market share rapidly. This strategy is suitable when demand for the product is price elastic or highly sensitive to price changes, making it less likely for consumers to buy the product when the price is high. By setting a lower price, the seller can attract a large number of customers, establish a foothold in the market, and potentially discourage competitors from entering the market. As the market share increases and the demand becomes more inelastic, the seller may gradually increase the price.

In the Context of Product Considerations in Pricing,a _____ Is