When a Firm Makes It Expensive and Inconvenient for Customers

question 39

Multiple Choice

When a firm makes it expensive and inconvenient for customers to switch to a competitor, the firm is:

• A)decreasing their switching costs.
• B)reducing search- related costs.
• C)increasing their bargaining power.
• D)increasing their switching costs.

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Definitions:

Service Contract

A legally binding agreement between two or more parties where one agrees to provide a specified service to the other for a payment.

Peace of Mind

A state of mental and emotional tranquility, free from stress or worry.

Availability Heuristic

A cognitive shortcut based on the first examples that spring to mind when considering a particular topic, idea, strategy, or choice.

Estimated Probability

A statistical measure expressing the likelihood of a specific event occurring based on current evidence or past occurrences.