--%>
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 : Explain the term average fixed cost

    Explain the term average fixed cost.

    		•
  • Q : Estimate d 8. The Real Kool Toys

    8. The Real Kool Toys Company manufactures and sells educational toys. An empirical demand function for one of the firm's products has been estimated over the last 21 quarters using regression analysis. The estimated demand function is: QY = -8,000 - 5,000PY + 192A + 120I + 2,000PX (6,000) (1,00

    		•
  • Q : Explain the steps for demand estimation

    Explain the steps for demand estimation.

    		•
  • Q : Negative Relationship in Demand for

    The demand curve for labor can be demonstrated as a negative relationship between: (w) the quantity of labor demanded and the wage rate. (x) labor productivity and the quantity of labor used. (y) employment and output. (z) wages and GDP.

  • Q : What is Diminishing Returns to Scale

    What is Diminishing Returns to Scale?

    		•
  • Q : Cost concept of business operation and

    Categories the cost concept of business operation and decision making?

    		•
  • Q : Estimate average wage differentials

    From the fact which the average wages of women into the United States is lower than the average wages of men, we can estimate that women are: (1) discriminated against in hiring and pay. (2) less qualified workers than men. (3) less interested into wa

    		•
  • Q : PRICE ELASTICITY OF DEMAND THE PRICE OF

    THE PRICE OF OIL IS $30 PER BARREL AND THE PRICE ELASTICITY IS CONSTANT AND EQUAL TO -0.5.AN OIL EMBARBGO REDUCES THE QUANTITY AVAILABLE BY 20 PERCENT.USE THE ARC ELASTICITY FORMULA TO CALCULATE THE PERCENTAGE INCREASE IN THE PRICE OF OIL

    		•
  • Q : Which term not used to calculate

    The entire given can be used to calculate average profit except: w) marginal profit minus marginal cost. x) total profit divided by quantity. y) average revenue minus average total cost. z) price minus average total cost.

  • Q : Legal incidence of tax burdens The firm

    The firm or individual responsible for paying a specified tax to the government bears: (w) stigma of being a tax evader when it is completely forward shifted. (x) full tax burden only when the tax is backward shifted. (y) legal incidence of the tax. (z) reduction in p

    		•