When a firm sets a low price for new product, this is said to be

When a firm sets a low price for a new product, it is said to be using penetration pricing strategy. This is a pricing strategy where a company sets a low initial price for a new product with the aim of gaining market share quickly. The goal is to attract customers and encourage them to try the new product, which will hopefully lead to increased sales in the future. This strategy is commonly used when a company is introducing a new product to the market or trying to break into a new market. It can help to create buzz and generate interest in the product, and can be an effective way to compete with established competitors.