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Doors Inc. is a technology company that focuses on creating operating systems, which are the software packages that run everything on a computer. The company is releasing the newest version of its operating system and is deciding on the appropriate pricing strategy. The CEO favors an aggressive market penetration strategy in order to gain market share, even if it means pricing the operating system at a level at which the company would lose money on every sale.
Which of the following observations, if true, strengthens the CEO’s argument?
Profits would come from support, maintenance, and sale of applications that are compatible with the operating system.
Customers frequently complain about the number of bugs in the initial releases of operating systems.
The promised technology behind the new operating system is considered by users and beta testers to be far ahead of existing products.
A large percentage of target customers are from nations with a poor history of intellectual property protection, where pirated software is easily available.
Pursuing a higher market share through cutting prices would force the company to incur large losses.