A Company Should Try to Retain the Customer Only as Long

question 12

True/False

A company should try to retain the customer only as long as the cost to discourage defection is lower than the lost profit.

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Definitions:

Incomplete

Characterizing something as not fully finished, lacking some parts, or not comprehensive.

Transitive

A relation is described as transitive if, whenever it relates some A to B and B to C, it also relates A to C.

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for another good while maintaining the same level of utility or satisfaction.

Perfect Substitutes

Two goods for which consumers are completely indifferent as to which to consume, meaning the consumption of one good can fully replace consumption of the other.