According to the PLC theory, what is the most likely reason that companies manufacture products in locations with high labor rates during the introductory stage of a product's life cycle?
A)Doing so allows use of long production runs using capital-intensive methods.
B)Many consumers are willing to pay high costs for the newest products.
C)Transportation costs are reduced by focusing on markets in developed countries.
D)Import restrictions prevent production in countries other than the ones making product innovations.

Question

Quizplus · Accepted Answer

During the introductory stage of a product's life cycle, companies can charge higher prices because early adopters are often willing to pay more for the newest products. This can offset the higher labor costs associated with manufacturing in locations with high labor rates.

According to the PLC Theory, What Is the Most Likely