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I don’t get it here- why “significant economies of scale” and “wishes to discourage new entrances to the market” can favour a penetration pricing policy please?
In future please put the name of the question in the heading as well. (It is because many students use our search box to look for previous answers to problems. BPP keeps many of the same questions each year, but question numbers and page numbers change).
The greater the economies of scale then the more they can afford to charge a low price.
A low price makes it harder for new entrants because they will not be able to match the price.I do mention both of these in my free lectures!
Sure! I will put the name of the question in the heading next time! This is my first time taking ACCA exams so I am sorry I don’t know that the page numbers weill change! And thank you for your help in all these aspects!
Oh then I must have forgot it again and I will go to check this lecture again, thank you so much, I understand these two now!!
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