The growth phase of the product life cycle is always dynamic. Which of the following does NOT occur in this phase?
A) Profits increase as sales increase.
B) Profits increase as economies of scale are attained.
C) Some new competitors may enter the market with similar products.
D) Some competitors will exit in an industry shakeout.
E) Price competition with protracted price wars erodes profits.

Question

Quizplus · Accepted Answer

The growth phase of the product life cycle is characterized by increasing sales and profits due to economies of scale, as well as the potential for new competitors to enter the market. Additionally, the phase often involves a shakeout period where weaker competitors exit the market. However, price competition with prolonged price wars is more likely to occur in the maturity or decline phases of the product life cycle, rather than the growth phase. Therefore, E is the correct answer as it does not occur in the growth phase.

The Growth Phase of the Product Life Cycle Is Always