If a Firm Is Facing Intense Competition on the Prices

question 64

Multiple Choice

If a firm is facing intense competition on the prices of its product and in turn it is leading to a decrease in the firm's profit margins, then the product is said to be in the stage of its life cycle.

• A)decline
• B)introduction
• C)maturity
• D)growth
• E)deterioration

---

Definitions:

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, indicating how fixed costs change with different levels of production.

Marginal Costs

The increase in total cost that arises from an extra unit of production.

Fixed Factors

Inputs in production that cannot be altered in the short term, such as buildings and machinery.

Output

The amount of goods and services produced by a business, industry, or economy.