Friday, July 25, 2014

Cross-Subsidization

One of the topics I talk about in both my MBA Managerial Economics course and in my Industry Analysis course is cross-subsidization - which is also called a loss leader.  The idea that I focus on is the market characteristics in which selling one good/service at at loss can be profitable when it allows the firm to sell another good at a profits.  Here is an excellent example of cross-subsidization:  oysters.

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