The correct answer is: C. product-cost cross subsidizing
Product-cost cross subsidizing is an approach in which a company under-costs one product and over-costs at least one product. This is done in order to make the under-costed product more attractive to customers, while still making a profit on the over-costed product.
There are a number of reasons why a company might choose to use product-cost cross subsidizing. For example, a company might want to introduce a new product to the market and make it more attractive to customers by under-costing it. Alternatively, a company might want to increase sales of a product that is not selling well by over-costing another product.
Product-cost cross subsidizing can be a successful strategy for increasing sales and profits. However, it is important to make sure that the under-costed product is not sold at a loss, and that the over-costed product is not priced so high that it drives away customers.
Here is a brief explanation of each option:
- A. service-cost across subsidizing: This is a type of cross-subsidization in which a company uses the profits from one service to subsidize the costs of another service. For example, a company might use the profits from its internet service to subsidize the costs of its phone service.
- B. product-price cross subsidizing: This is a type of cross-subsidization in which a company uses the profits from one product to subsidize the costs of another product. For example, a company might use the profits from its high-end products to subsidize the costs of its low-end products.
- C. product-cost cross subsidizing: This is a type of cross-subsidization in which a company under-costs one product and over-costs at least one product. This is done in order to make the under-costed product more attractive to customers, while still making a profit on the over-costed product.
- D. product cross subsidizing: This is a type of cross-subsidization in which a company sells two or more products at a loss in order to increase sales of another product. This is often done when a company is trying to introduce a new product to the market.