A firm must devote people, time, and money to designing a new product.Because any firm has only limited resources, it
A)should wait until its competitors develop a similar product before deciding on devoting resources to its own product development.
B)is not able to develop more than one new product at a time.
C)must be certain that the product it chooses to develop will be successful or it will not be able to stay in business.
D)faces a trade-off, because resources used to develop one product will not be available to develop another product.

Question

Quizplus · Accepted Answer

Limited resources mean that a firm must prioritize its product development efforts. Developing one product means that resources are being taken away from other potential product developments. Therefore, a firm faces a trade-off when it comes to resource allocation. Waiting for competitors to develop a similar product (A) can result in missed opportunities, and it is possible for a firm to develop more than one new product at a time (B). C is not true as even successful firms experience product failures.

A Firm Must Devote People, Time, and Money to Designing