Question

The growth phase of the product life cycle is always dynamic. All of the following occur during this phase except Multiple Choice

A. profits increase as sales increase.
B. profits increase as economies of scale are attained.
C. some new competitors may enter the market with similar products.
D. some competitors will exit in an "industry shakeout."

Answer 1

During the growth phase of the product life cycle, profits increase due to higher sales and economies of scale, and new competitors may enter the market. However, competitors exiting during an industry shakeout typically do not happen in this phase.

Step-by-step explanation:

In the growth phase of the product life cycle, many dynamic activities occur as the product starts to gain acceptance in the market. Among these activities are:

Profits increase as sales increase.

Profits increase due to economies of scale being attained.

New competitors may enter the market with similar products in response to increased profits, an activity referred to as entry.

However, what does not occur during this phase is D. some competitors will exit in an "industry shakeout." An industry shakeout typically occurs in the maturity or decline stage, not during the growth stage. During the growth stage, the market is expanding, profits are rising, and more firms are enticed to enter rather than exit.

Answer 2

Answer: All the above options are correct as the growth phase of a product life cycle.

Explanation: The only thing that could have affected the growth phase is if there is price competition with protracted price war which erodes profits.