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If an entrepreneur prices a product too low then what risk may occur?

Answer and explanation

Correct answer: The business may not be sustainable if costs are not recovered

A low price may attract customers, but the selling price must still cover relevant costs over time and support continued operations. If revenue is consistently below total cost, the enterprise may face losses, cash-flow problems, and inability to maintain quality or supply. Customers will not always be angry, competition will not automatically disappear, and quality does not rise by itself. Hence A is correct.

Related tags

PricingCost-RecoveryBusiness RiskBusinessTrade And CommerceBusiness Trade And CommerceBusiness StudiesClass 11 Mcq

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