--%>
Assignment Help - homework help

What are the reasons for adopting penetration price strategy

What are the reasons for adopting penetration price strategy?

E

Expert

Verified

Reasons for adopting Penetration price strategy are as follows:

1. Product consists of high price elasticity in the first stage.

2. The product is accepted through huge number of customers.

3. Economies of large scale production obtainable to firm.

4. Potential market for the product is huge.

5.  Cost of production is low.

6. For introducing product in market.

7. For discouraging new competitors.

8. Most of the prospective consumers are within low income class.

   Related Questions in Managerial Economics

  • Q : Demand demand has three

    demand has three essentials-damand+purchasing power+.???

    		•
  • Q : Concavity in production possibilities

    Concavity (or bowed-out shapes) in production possibilities frontiers is described least fine by: (i) The law of diminishing returns. (ii) Resources being unevenly suited for various forms of production. (iii) Rising opportunity costs. (iv) Non-neutra

    		•
  • Q : Opportunity costs of purely financial

    By a purely financial perspective, you must stop going to school while you: (w) graduate from college. (x) have to take out educational loans at interest rates which exceed the inflation rate. (y) face opportunity costs of education exceeding the expe

    		•
  • Q : Signaling and Screening Completing your

    Completing your degree is probably to be a significant signal which will help you secure a well-paid job along with a bright future if potential employer: (1) want to ensure that job applicants have already obtained important amounts of specific human capital. (2) use

    		•
  • Q : Statements about Human Capital Which of

    Which of the given statements is not CORRECT: (w) Acquiring productive skills is known as investment in human capital. (x) General training increases a worker’s marginal productivity equally for many firms. (y) Specific training increases the productivity of the

    		•
  • Q : Income and Substitution Effects of

    When the substitution effect of a wage raise dominates the income effect, in that case the: (1) labor supply curve will be "backward bending." (2) value of the marginal product will exceed the wage rate. (3) labor force participation

    		•
  • Q : Raise in supply and demand and

    When the supply and demand for a good both raise there will be rising within the: (1) market price. (2) equilibrium quantity. (3) quality of the good. (4) profits of a monopoly firm. (5) level of consumer satisfaction. Hello guys I

    		•
  • Q : Explain the Proportional Method of

    Explain the Proportional Method of Measurement of Elasticity.

    		•
  • Q : Marginal revenue product and marginal

    When the marginal revenue product of the last worker hired through a large firm is fewer than its marginal resource cost, in that case the firm: (i) increases profits if this lies off a few workers. (ii) operates in a region of decrea

    		•
  • Q : Explain the aspects of operational or

    Explain the aspects of operational or internal issues.

    		•