The price elasticity of demand for product X is becoming more inelastic as many ﬁrms that produce X and consumers of X are exiting the market. The price of product X has remained more or less stable. In other words, product X is in the _____ phase of its life cycle.
A) decline
B) growth
C) maturity
D) introductory

Question

Quizplus · Accepted Answer

The decline phase of a product life cycle is characterized by a decrease in consumer interest and demand, leading to a reduction in the number of producers and consumers in the market. The price elasticity of demand becomes more inelastic because the remaining consumers are less sensitive to price changes, often due to loyalty or lack of alternatives. This scenario fits the description provided.

The Price Elasticity of Demand for Product X Is Becoming