Selling a product below its equilibrium price may be a profit maximizing strategy for a firm if it leads to a desired spillover effect in another market where the firm operates.

Question

Quizplus · Accepted Answer

Selling a product below its equilibrium price can attract more customers or increase market share in a related market, leading to higher overall profits through spillover effects, such as increased sales of complementary goods or services.

Selling a Product Below Its Equilibrium Price May Be a Profit