Which of the following statements is true of lossleader pricing?
A) Retailers price a handful of items temporarily above cost to drive traffic.
B) Retailers lose money on some products, but make up the difference on other purchases.
C) Retailers generally place lossleader products at the front of the store.
D) Retailers continuously offer products at a low price.

Question

Which of the following statements is true of loss­leader pricing?
A) Retailers price a handful of items temporarily above cost to drive traffic.
B) Retailers lose money on some products, but make up the difference on other purchases.
C) Retailers generally place loss­leader products at the front of the store.
D) Retailers continuously offer products at a low price.

Quizplus · Accepted Answer

Loss-leader pricing is a strategy where retailers offer selected products at a price lower than their cost to attract customers, with the hope that they will buy other products where the retailer can make up for the lost profit. Therefore, option B is the correct statement. Option A is also true, but it doesn't encompass the full scope of loss-leader pricing. Option C and D are not necessarily true for all retailers implementing loss-leader pricing.

Which of the Following Statements Is True of Loss­leader Pricing

Which of the Following Statements Is True of Lossleader Pricing