Loss leaders are viewed as being particularly attractive by many retailers since they ________.
A) generate consumer store traffic throughout the store
B) ultimately destroy small, marginal competitors
C) are legal
D) are not forms of deceptive advertising according to FTC guidelines

Question

Quizplus · Accepted Answer

Loss leaders are items that are advertised at a loss in order to attract customers into the store, with the hope that they will make additional purchases while there. By generating consumer store traffic throughout the store, retailers hope to increase overall sales and profits. While loss leaders can ultimately result in the closure of smaller competitors who cannot afford to operate at a loss, this is not necessarily the primary motive behind their use. Additionally, the legality and compliance with FTC guidelines of loss leader advertising varies depending on the specific circumstances and pricing strategies used.

Loss Leaders Are Viewed as Being Particularly Attractive by Many