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 the price that can usually be charged.
D) the lower its production costs are.
E) the lower its unit variable cost is.

Question

Quizplus · Accepted Answer

The earlier a product is in its life cycle, the higher the demand and the fewer competitors there are, which allows the firm to usually charge a premium price. As the product matures and competition grows, the price usually drops. Choices A, B, D, and E do not accurately reflect the relationship between a product's life cycle and its pricing.

Newer a Product and the Earlier It Is in Its