When a Firm Starts to Realize Substantial Profits from Its

question 94

Multiple Choice

When a firm starts to realize substantial profits from its investment in a product,the product is said to be in the _____ stage of the product lifecycle.

• A)decline
• B)introductory
• C)growth
• D)maturity

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Definitions:

Law of Diminishing Marginal Utility

The principle that as a person increases consumption of a product, there is a decline in the marginal utility that person derives from consuming each additional unit.

Ability-To-Pay Principle

The idea that those who have greater income (or wealth) should pay a greater proportion of it as taxes than those who have less income (or wealth).

Marginal Cost

the additional cost incurred to produce one more unit of a good or service.

Marginal Benefit

The added joy or utility one achieves by consuming an additional unit of a product or service.