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An entrepreneur prices a product below competitors but incurs a loss on every sale. Why is this strategy unsustainable?

Answer and explanation

Correct answer: Total loss may increase as the number of sales rises

If each sale makes a loss, selling more units can add to the total loss rather than solve the problem. For example, if the loss per unit stays the same, each additional unit adds that loss again. Therefore, option B is correct; a low price or high sales volume does not by itself guarantee profit.

Related tags

PricingCost ManagementProfit And LossIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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