Profits rise during the growth stage of the PLC because promotion costs are spread over a large volume and unit manufacturing costs fall.

Question

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During the growth stage of the PLC, sales volume increases rapidly which results in spreading promotional costs over a large volume of sales. This leads to a decrease in the per-unit cost of promotion. In addition, unit manufacturing costs fall due to economies of scale as production volume increases. As a result, profits generally increase during the growth stage.

Profits Rise During the Growth Stage of the PLC Because