What term describes an initial low offer followed by increased costs?

The correct term that describes an initial low offer followed by increased costs is "lowballing." This strategy typically involves presenting an initial price that is significantly lower than what is realistic or what the final costs will be. This tactic can be used to attract customers or clients under the illusion of a bargain, with the expectation that they will eventually face higher costs later on.

In negotiation scenarios, lowballing can create a misleading perception of value, which may manipulate the buyer’s expectations. The practice often leads to feelings of frustration or mistrust once the true costs emerge, as clients may feel they were misled.

Highballing, on the other hand, involves starting with a high offer, which is not applicable in this context. Negotiation as a broader term does encompass various strategies but does not specifically indicate the nature of starting with a low price followed by increases. Undercutting refers to offering a lower price than competitors, but it does not inherently imply a later increase in costs.