In the Context of a Firm's Product Diffusion Curve,when There

question 22

Multiple Choice

In the context of a firm's product diffusion curve,when there is a chasm between early adopters and early majority customers:

• A) the firm must reduce its production capacity.
• B) the firm should improve its efficiency to target the mass market.
• C) the early majority market becomes saturated.
• D) the early majority market is ready to buy the product.

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Definitions:

Average Product

A metric that measures output per unit of a variable input, calculated by dividing total production by the quantity of the variable input.

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit decreases beyond a certain point.

Diminishing Marginal Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot increase forever and will eventually decrease.

Marginal Product

The additional output that is produced by adding one more unit of a certain input while holding other inputs constant.