Madfly Communication,a mobile manufacturer,offers free mobile connections to people who buy its mobile phones.The cost of the mobile connection is actually included in the price of the mobile phone.Madfly Communication is pursuing a(n)________ approach for applying freeconomics.
A) cross subsidies
B) gift economy
C) zero marginal cost
D) advertising
E) freemium

Question

Quizplus · Accepted Answer

Madfly Communication is using cross subsidies because they are offering free mobile connections to those who buy their mobile phones, and the cost of the mobile connection is included in the price of the phone. This allows Madfly Communication to offer the mobile connections for free while still making money from the sale of their phones.

Madfly Communication,a Mobile Manufacturer,offers Free Mobile Connections to People Who