The manufacturer of a fat-free ice cream with the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product. which of the following conditions would argue against using a penetration pricing strategy?

The ice cream market exhibits inelastic demand over a fairly broad range of prices

Explanation:

            People usually tend to go for the product which is low at price. Most of the company takes advantage of this trend and sell their product in the market.

            Penetration pricing is a strategy used by the company to attract customers. In this strategy, the price of a new product is set low initially so that it can capture the market and the word of mouth. And people tend to shift to this product of lower price in the market.

          Inelastic demand is term used when the demand of a product does not increase or decrease corresponding to the rise or fall of the prices of the product.

Thus the statement which argues against using a penetration pricing strategy for a fat-free ice cream in using penetration pricing strategy is

The ice cream market exhibits inelastic demand over a fairly broad range of prices.

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