Would a business ever sell its product for less than cost?

A business could sell its products at a loss for a short
duration of time if doing so could improve the chances of the business making higher
profits in the future.

This can be the case if the business
is a new entrant and there are already many competitors to deal with. The low prices
could be used to make people aware about its products, use them and make them switch
from the players already in the market.

This is not
something that can be sustained over a long time and the business would soon have to
increase the price of the products to a sustainable cost and hope the customers that
have been acquired continue to stick with it.

Another
reason why a business would sell its products at below cost would be to force smaller
competitors to shutting their operation. This can only be done by very large businesses
with sufficiently large reserves who want to expand their consumer base and enter new
markets. The strategy would work if the pre-existing players in the new markets cannot
compete with the low rates and do not have reserves to sustain loss for a small time
duration.