Question

A family just changed to a different mobile phone and data service provider. They now need take some time to transfer their content to new phones and learn the features of the new service. This is an example of a:

	a.	one-time cost suppliers incur when selling to a different customer.
	b.	switching cost customers incur changing to a new supplier.
	c.	one-time cost of product differentiation.
	d.	decrease in cost due to economies of scale.

Answer 1

Option b.switching cost customers incur changing to a new supplier

Switching cost is usually in the form of time and effort due to the disruption in the normal course of work. This cost is usually charged from the customers in order to discourage them to switch to other brands like in the case as given. The companies wants to make switching cost as high as possible. Providing better features and application that makes consumers used to it which are not provided by other competitive brands is also a type of switching cost.