{"id":44793,"date":"2024-04-15T21:48:45","date_gmt":"2024-04-15T21:48:45","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=44793"},"modified":"2024-04-15T21:48:45","modified_gmt":"2024-04-15T21:48:45","slug":"an-approach-in-which-company-under-costs-its-one-product-and-over-costs-at-least-one-product-is-classified-as","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/an-approach-in-which-company-under-costs-its-one-product-and-over-costs-at-least-one-product-is-classified-as\/","title":{"rendered":"An approach in which company under-costs it’s one product and over-costs at least one product is classified as"},"content":{"rendered":"

[amp_mcq option1=”service-cost across subsidizing” option2=”product-price cross subsidizing” option3=”product-cost cross subsidizing” option4=”product cross subsidizing” correct=”option3″]<\/p>\n

The correct answer is: C. product-cost cross subsidizing<\/strong><\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

Here is a brief explanation of each option:<\/p>\n