Penetrating pricing strategy is appropriate when ________.

price elasticity of demand in the market is highly inelastic

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price elasticity of demand in the market is uncertain

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price elasticity of demand in the market is highly elastic

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income elasticity of demand in the market is negatively elastic

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Solution

The correct option is A price elasticity of demand in the market is highly elastic
1:Penetrating pricing strategy is appropriate when price elasticity of demand in the market is highly elastic. 2:This strategy can be useful only when the proportionate change in quantity demand is greater than the proportionate change in the price of the commodity.
3:Penetration pricing is most appropriate when demand for a new product is expected to be high and the product can be easily copied by many competitors.

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