General Studies · Pricing Strategies

A market penetration pricing strategy is most suitable when:

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1A high initial price deters new competitors from entering.
2Production and distribution costs fall significantly with increasing scale of production.✓
3The demand for the product is highly price inelastic.
4Lower prices encourage aggressive immediate market competition.

Correct answer

Production and distribution costs fall significantly with increasing scale of production.

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