Option 1 -> Lower prices attract a greater number of customers, helping the firm gain larger market share through penetration pricing strategy.
Option 2 -> Higher prices typically deter customers and attract fewer buyers, not greater numbers, which contradicts market share expansion goals.
Option 3 -> Higher prices with fewer customers results in reduced market share, opposite to the firm's objective of gaining larger market share.
Option 4 -> Lower prices inherently attract more customers, not fewer, making this combination logically inconsistent.
Hence, Option 1: Lower, Greater -> When a firm aims to capture a larger market share, it implements a penetration pricing strategy by keeping prices at lower levels. This competitive pricing makes the product more accessible and affordable, thereby attracting a greater number of customers away from competitors. The increased sales volume compensates for lower profit margins per unit, ultimately resulting in expanded market share. -> correct