cross-subsidy

Profitable subsidizes unprofitable

Cross-subsidy is the practice of using profits or revenue from one product, service, or customer group to offset losses or reduce prices for another.

Companies and governments use cross-subsidies strategically: a grocery store might sell milk at a loss to attract shoppers who then buy profitable items, or a utility might charge urban customers more to keep rural service affordable.

The airline's business class fares essentially cross-subsidize economy tickets.

funding

underwriting

Risk evaluation and acceptance

capitalization · endowment · patronage · investment · allocation · provisioning · contribution · grants

mechanism

bundling

Grouping items as one

economics

externalities

Uncompensated effects on others

monopoly · inefficiency · transparency

redistribution

equity

Impartial treatment or ownership value

welfare · accessibility · rural-urban · have-nots · disadvantaged

sectors

telecommunications

Remote signal transmission technology

banking · transportation · energy · education · pharmaceuticals · aviation · rail · broadcasting · water · electricity

Categories
Opposites
funding source

cross-subsidygovernment subsidy

State financial support payment

government grant · grant funding · public subsidy · self-funding · bailout

financial self-sufficiency

cross-subsidyself-funding

Paying one's own way

cost recovery · financial independence · profit center · self-sustaining · unsubsidized

pricing philosophy

cross-subsidytransparent pricing

Clearly disclosed cost structure

pay-as-you-go · ring-fencing

Family

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Used worldwide · Timeless · Abstract · Rated G