What type of costs are involved when a consumer or firm must spend money in order to change from one product to another brand or change suppliers?
A) exchange costs
B) external costs
C) substitution costs
D) switching costs

Question

Quizplus · Accepted Answer

Switching costs refer to the costs that a consumer or firm has to pay while changing from one product to another brand or changing suppliers. These costs may include actual monetary expenses (such as termination fees, retraining costs, or installation fees) as well as intangible costs (such as time, effort, or emotional investment in the previous product/supplier). Therefore, option D is the most appropriate answer.

What Type of Costs Are Involved When a Consumer or Firm