High Switching Cost Refers to

question 40

Multiple Choice

High switching cost refers to

• A)a strategy used by telecom providers to retain customers.
• B)a strategy employed by companies to lock in customers by making it difficult or expensive to switch to another product.
• C)an illegal tactic that prevents customers from leaving by charging a prohibitive service termination fee.
• D)a strategy employed by companies to prevent customers from renegotiating service contracts.
• E)a service charge that discourages customers from switching service providers.

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Definitions:

Financing Cost

The interest and other costs incurred by a company to borrow funds or access other forms of financing.

Bad Debt

Money owed to a company that is not expected to be paid by the debtor, often leading to a write-off.

Credit Policy

A Credit Policy is a set of guidelines that govern the extension of credit to customers, outlining the criteria for extending credit and the terms of repayment.

Investing Decision

Choices made by individuals or firms regarding the allocation of resources to investment opportunities with the aim of achieving additional income or capital gains.