Which of these is the BEST example of a loss leader?
A) a gas station selling gasoline below market value to drive out competitors
B) a gas station selling hot dogs well below market value to bring in customers
C) a gas station advertising car washes to diversify its business
D) a gas station hiring attendants to improve customer service

Question

Quizplus · Accepted Answer

A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. In this case, selling hot dogs well below market value to attract customers to the gas station, where they may purchase other items at a profit, is the best example of a loss leader strategy.

Which of These Is the BEST Example of a Loss