The Product Life Cycle Model Is a Theoretical Construct That

question 6

Multiple Choice

The product life cycle model is a theoretical construct that helps franchisors understand the industry cycle and the cycle of specific products or services with a franchise system's product line."When sales continue to grow but are increasing at a decreasing rate" is associated with which stage of the product life cycle?

• A)introduction
• B)growth
• C)retention & evaluation
• D)decline

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Definitions:

Producer Surplus

The gap between what sellers are prepared to take for a product or service and the actual amount they get.

Inelastic

This refers to a lack of sensitivity in the quantity demanded or supplied when the price changes.

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to a change in price.

Substitute Goods

Products or services that can be used in place of one another, with their demand being inversely related: as the price of one rises, the demand for the other increases.