When a Business Effectively Builds in Switching Costs, Its Customers

question 118

True/False

When a business effectively builds in switching costs, its customers and/or suppliers become reluctant to switch to another competitor.

---

Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, rent for production facilities, and maintenance expenses.

Factory Equipment

Machinery and tools used in a manufacturing process to produce goods.

Indirect Material

Materials used in the production process that do not end up as part of the final product, such as lubricants for machinery.

Product Costs

Expenses directly associated with creating a product, including direct materials, direct labor, and manufacturing overhead costs.