Question

Which pricing policy is probably "best" for a profit-oriented, low-cost producer who is introducing a new product into a market with elastic demand and is expecting strong competition very soon after product introduction? 1. skimming pricing 2. meeting competition pricing 3. status-quo pricing 4. introductory price dealing 5. penetration pricing?

Answer 1

5. Penetration Pricing
Firms typically do this when offering a new product to take away some of the market shares of competitors by lowering the price of their products.