Underpricing is a pricing strategy whereby companies charge an amount just below cost in order to generate sales in the introductory stage of a product's life cycle.

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Underpricing refers to setting a product's price lower than the market rate or competitors' prices to attract customers or gain market share, not necessarily below cost. Charging below cost is more accurately described as a loss leader strategy, not a typical approach for the introductory stage of a product's life cycle.

Underpricing Is a Pricing Strategy Whereby Companies Charge an Amount