A loss leader is typically sold below its cost to attract customers to buy other complementary goods or services that are more profitable.

Solved

A Loss Leader

Question 48

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 variable cost to encourage sales of a complementary good

Correct Answer: