When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,which type of strategy is it following? (The low price is designed to capture a large share of a substantial market and produce lower production costs. )
A) price elasticity
B) penetration pricing
C) price skimming
D) cost bundling

Question

Quizplus · Accepted Answer

The strategy being followed by the firm is penetration pricing, which involves introducing a new product at a low price to capture a large share of the market. This is often used as a strategy to break into new markets and gain market share quickly. By keeping prices low, the firm is able to reduce production costs through economies of scale, as it sells more units. This can also help to establish the brand in the minds of consumers, enabling the firm to increase prices over time as demand increases.

When a Firm Introduces a New Product at a Relatively