Why do profits increase during the growth stage of the PLC?
A) Promotion costs are spread over a large volume.
B) Unit manufacturing costs fall.
C) Competition has not yet taken sales away.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

During the growth stage of the PLC, sales are increasing rapidly, allowing for promotion costs to be spread over a large volume. As production levels increase, unit manufacturing costs tend to fall due to economies of scale. Competition has not yet fully entered the market, allowing for businesses to capture a larger market share and increase profits. Therefore, all of the above are reasons why profits increase during the growth stage of the PLC.

Why Do Profits Increase During the Growth Stage of the PLC