Sales at ABC Party Supply have fallen off significantly over the past three years. Which of following is least applicable to this situation?
A)ABC's market is mature.
B)ABC's products are obsolete.
C)Substitutions are on the rise.
D)Costs are rising.
E)All of the above

Question

Quizplus · Accepted Answer

costs are rising. It maybe that ABC Party has reaches its maturity phase, that its products are no longer in demand or that competition is increasing. It doesn't necessarily mean its costs are rising.
Key Takeaway: The instinct is to always use the profit formula. However, in the case of lagging sales, the question isn't asking about profit. It's asking why the product is not selling, so time spent on cost should not be an issue. If you want to completely rule out cost, ask if competitors are able to undercut on price because of ABC's rising cost. We included this question as a reminder to focus quickly on the most relevant areas based on the way the question is framed.

Sales at ABC Party Supply Have Fallen Off Significantly Over