What do retailers often price below their cost to attract customers?

A loss leader is a pricing strategy where retailers set the price of certain products below their cost with the intent of attracting customers to their stores. The idea behind this tactic is that while the retailer makes a loss on the initial sale, the hope is to drive foot traffic into the store - customers may then purchase additional items that are priced at a higher margin, ultimately leading to greater overall profits for the retailer.

Using this strategy allows retailers to compete effectively, especially in markets where consumers are price-sensitive. By offering popular items at lower prices, retailers can entice customers away from their competitors. This encourages not just the purchase of the loss leader item but also creates opportunities for upselling additional products that contribute to the store's overall profitability.

In contrast, the other options do not fit the context of attracting customers in the same way. Price fixing refers to the practice of colluding with competitors to set prices at a certain level, rather than engaging in competitive pricing strategies. Competition, while relevant to pricing, is a broad concept and does not specifically describe a tactic of pricing items below cost. Lastly, assets are resources owned by a business, which is unrelated to pricing strategies used to attract customers.