Final answer:
Businesses in the maturity stage of their life cycle often respond by exploring new markets to sustain growth. They may optimize operations, but typically do not resort to reintroducing old products or seeking government help as a primary response.
Step-by-step explanation:
One way that businesses respond to the maturity stage of the life cycle is to look for new markets. During the maturity stage, a product or service has saturated its current market, and growth rates slow down. Businesses may seek new markets to sustain growth, adapt their product offerings, or find new consumer segments. It’s also a period where businesses may refine or optimize their operations for efficiency.
The theory of the firm teaches that although competition leads to lower prices and innovative products, large-scale production can lower costs. However, markets are not perfectly competitive in reality, necessitating government intervention at times. Government plays a role in correcting market failures, guiding, and influencing market outcomes, and investing in areas such as education and technology to facilitate capital deepening.
While a business in the maturity stage might refine its products or explore global markets to reignite growth, it generally does not seek to reintroduce old products or rely on help from the government as a primary strategy.