Penetration pricing means charging a relatively low price for a product as a way to reach the mass market. The low price is designed to capture a large share of a substantial market. Thus, penetration pricing:
a. tends to be more effective in a less price-sensitive market.
b. tempts competitors to enter the market.
c. provides a large profit per unit sold.
d. recoups product development costs quickly.
e. tends to lower production costs.
ANSWER: e