Question

A company that intends to maintain low-end pricing policies to make the market unattractive for its competitors is using which of the following pricing objectives in its price planning?

A) sales
B) profit
C) break-even
D) competitive effect
E) customer satisfaction

Answer 1

A company using low-end pricing policies to discourage competition is implementing a competitive effect pricing objective. The correct option is D.

Step-by-step explanation:

The company that intends to maintain low-end pricing policies to make the market unattractive for its competitors is using the competitive effect objective in its price planning.

This strategy is employed to deter the entry of new competitors into the market by limiting profitability prospects.

Such a pricing strategy aims not necessarily to maximize profit in the short term but to secure market share and establish barriers to entry for potential competitors. The correct option is D.