Final answer:
The maturity stage of the product life cycle is the phase where the product's profit margin decreases over a long period due to market saturation and increasing competition.
Step-by-step explanation:
The stage of the product life cycle that stretches over a relatively long period of time during which the profit margin decreases is typically known as the maturity stage. During this phase, the market becomes saturated with the product, and the competition among producers tends to increase. Technological changes such as the advent of the assembly line or large department stores favor large-scale producers over smaller ones, resulting in an extended period of economies of scale where the long-run average cost curve shows a downward slope for a larger quantity of output. This is reflective of a decreasing cost industry, where as the market grows, both old and new firms experience lower costs of production, shifting the zero-profit level to lower prices. Consequently, in the maturity stage, businesses may find it challenging to maintain high profit margins as prices trend downward.