A market-penetration pricing strategy is most suitable when ________.
A) a low price slows down market growth
B) production and distribution costs fall with accumulated production experience
C) a high price dissuades potential competitors from entering the market
D) the market is characterized by inelastic demand
E) a low price encourages actual competition

Question

Quizplus · Accepted Answer

Market-penetration pricing strategy is used to penetrate the market quickly by setting a low price initially to attract a large number of customers. As production and distribution experience accumulates, costs fall, and price can be raised gradually. Therefore, B is the most suitable choice.

A Market-Penetration Pricing Strategy Is Most Suitable When ________