In the maturity stage, a firm
A) is growing about the same rate as the economy as a whole.
B) has returns on assets lower than those of the industry norm.
C) loses market share and suffers a decline in profitability.
D) pays out all earnings in dividends.

Question

Quizplus · Accepted Answer

During the maturity stage, a firm's growth rate is slowing down, and it is typically growing at the same rate as the overall economy. The company has already established itself in the market, and its focus shifts to maintaining its position and improving efficiency. Therefore, it is not losing market share or suffering a decline in profitability, as in option C. Additionally, option D is unlikely, as a firm typically reinvests earnings to maintain its position in the market. However, option B could be possible as the firm may have lower returns compared to the industry average due to increased competition, but it is not a general rule.

In the Maturity Stage, a Firm