Which of the Following Statements Is True About Product Life

question 24

Multiple Choice

Which of the following statements is true about product life cycle theory?

• A) In the early stages of the product life cycle, the demand for the new product is relatively insensitive to the price, and thus, a pioneering firm can charge a relatively high price.
• B) It predicts that over time, the U.S. switches from an exporting country of new products to an importing country.
• C) It has an "S" shaped curve when plotting "quantity sold" versus "time".
• D) All of these.

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Definitions:

Marginal Cost

The increase in cost that results from producing one additional unit of a good or service.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, providing a base cost for operating a business.

Total Cost

The sum of all funds utilized in the production of goods or services, including both fixed and variable costs.

Marginal Cost

The rise in overall manufacturing expenses resulting from the creation of an extra unit.