When deciding on which new products to develop, 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

Since a firm has limited resources, it must make a trade-off when deciding which products to develop. Devoting resources to one product means those resources cannot be used for another product. Therefore, the firm must carefully decide which product to develop to maximize its return on investment.

When Deciding on Which New Products to Develop, a Firm