A cell phone company offers a promotion in which it gives away a free phone to people who purchase the highest-level data usage plan.This is an example of which of the following?
A)balance subsidies
B)promotional subsidies
C)direct cross-subsidies
D)risk reduction subsidies

Question

Quizplus · Accepted Answer

This is an example of direct cross-subsidies because the company is using the revenue from the high-level data usage plans to subsidize the cost of the phones, effectively offering them for free to those customers.

A Cell Phone Company Offers a Promotion in Which It