A penetration pricing policy is most likely to be effective when
A. lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B. enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.
C. unit production and marketing costs fall dramatically as production volumes increase.
D. customers interpret the high price as signifying high quality.
E. the high initial price will not attract competitors.
Answer: C
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