Now that's Marketing - you Retained a Customer, you Sold more than you would have otherwise, and you made a Profit. Nicely Done.
Now as for that Broken Clock - was not being Rude. Too bad you took it that way. Option 'C' should NEVER be chosen. That's your Customer who came back to you looking for some form of satifaction. That Customer bought a clock from you for which you presumably made a Profit. To Sell that Customer a new Clock at Cost or slightly above Cost does not Cost you anything - you Retain a Customer.
When you choose Option 'C', you almost assuredly lose that Customer - and everybody else that he / she tells. This is the world of Social Media. Do not be surprised if you end up on some of these Social Media sites after choosing Option 'C' and being a Marketing You-Know. Recently, CNN reported a restaurant shutting down in Arizona after getting hammered on Social Media for being a Marketing You-Know.
Repeated Studies have shown that it costs roughly 20 times as much to Gain a new Customer as it does to Retain an existing Customer. Selling a Product at Cost or slight Profit costs you nothing to Retain that existing Customer. Remember - that Customer came to YOU looking for YOU to solve that Customer's Problem.
Do not be a Marketing You-Know. (Was not being Rude).