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What is the biggest risk of selling below cost for a long time?

Answer and explanation

Correct answer: The business may face continuous loss

When the selling price remains below the relevant cost, each unit may contribute a loss unless another justified source offsets it. Continuing this practice can consume working capital, weaken the ability to pay obligations, and threaten survival. Low pricing may sometimes be temporary and strategic, but it requires a clear plan and cannot guarantee higher profit or permanent customer growth.

Related tags

PricingLossPriceMarketing ManagementBusiness StudiesClass 12 Mcq

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