A loss leader is a pricing strategy where a product is sold at a price below its marginal cost to stimulate the sales of more profitable goods or services.

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A Loss Leader

Question 60

Multiple Choice

A loss leader:

A) is a product that is sold at a price above its direct marginal cost to encourage sales of a complementary product.
B) is a product that is sold at a price below its direct marginal cost to encourage sales of a substitutable good.
C) is a product that is sold at a price below its direct marginal cost to encourage sales of a complementary good.
D) is a product that is sold at a price below its direct marginal cost to encourage sales of a substitutable and complementary good.

Correct Answer: