According to the product life cycle model, profits tend to
A) remain relatively constant until the decline stage, when they begin to drop.
B) reach a peak near the end of the maturity stage.
C) rise rapidly during the market preference stage.
D) peak before sales reach their highest level.

Question

Quizplus · Accepted Answer

Profits typically peak before sales reach their highest level because, as a product moves through its life cycle, competition increases, which can lead to price reductions and higher marketing and production costs to maintain or grow market share. This dynamic can lead to a peak in profits before the peak in sales, as costs rise and price pressures intensify.

According to the Product Life Cycle Model, Profits Tend to