Which of the Following Statements About the Product Life Cycle

question 167

Multiple Choice

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

• A) The newer a product is, the higher the price that can usually be charged.
• B) The later in the product life cycle a product is, the higher the price that can usually be charged.
• C) Once a product is considered nostalgic, the price will continue to rise indefinitely.
• D) Fads will generally have only two price points-high and low-but the values of those price points will remain basically the same.
• E) Prices should not be changed until a product reaches the maturity stage.

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Definitions:

Monetary Rule

A guideline for the monetary policy stating that the central bank should aim at regulating the money supply to maintain stable prices, output, and employment.

Rational Expectations

An economic theory proposing that individuals make decisions based on their best forecast using all available information, predicting future events with some degree of accuracy.

Federal Reserve

The central bank of the United States, responsible for monetary policy.

Life Expectancy

The average period that an organism is expected to live, based on statistical analysis.