9. The tactic of using loss leaders is sometimes referred to as the razor strategy because firms...

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9. The tactic of using loss leaders is sometimes referred to as the ‘razor strategy’ because firms who sell razors do so below cost but then charge high prices for replacement blades. What sort of razors do you think this sort of tactic would work with. (Hint: think of the difference between a product such as the Gillette Fusion and disposable razors such as those produced by Bic.) How does a firm prevent consumers treating the razors used as loss-leaders from being treated as disposable?

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Business Economics

ISBN: 388402

2nd Edition

Authors: Mark P. Taylor, Andrew Ashwin, N. Gregory Mankiw

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