The newer a product and the earlier it is in its life cycle,
A)the lower the price the firm must charge.
B)the more competition it has.
C)the higher is the price that can usually be charged.
D)the lower the production costs.
E)the lower the unit variable cost.

Question

Quizplus · Accepted Answer

When a product is first introduced, it usually has no direct competitors, and there may be high demand from early adopters. Therefore, the firm can typically charge a higher price at the beginning of the product life cycle. As time goes on and competition increases, the price may need to be lowered to remain competitive.

The Newer a Product and the Earlier It Is in Its