Market penetration pricing by newcomers is apt to be most successful when:
A)network externalities lead to significant first-mover advantages.
B)established and thriving firms enjoy customer lock-in effects.
C)aggressive predatory pricing strategies are necessary to limit competitor entry.
D)applied in competitive markets.

Question

Quizplus · Accepted Answer

Market penetration pricing is most successful when there are network externalities that lead to significant first-mover advantages. This is because users are more likely to choose the product with the largest network, making it difficult for competitors to enter the market. In this situation, newcomers can use market penetration pricing to quickly gain market share and establish themselves as a dominant player. Market penetration pricing by newcomers is most successful when network externalities lead to significant first-mover advantages. This is because being the first mover in a market with network effects can provide a company with a significant advantage, as early adopters of the product or service will continue to use it and even recommend it to others, creating a self-reinforcing cycle. This makes it difficult for competitors to gain a foothold in the market, allowing the new entrant to establish a strong position and pricing power.

Market Penetration Pricing by Newcomers Is Apt to Be Most