Final answer:
During the growth stage of the product life cycle, prices increase in order to solidify the market position of specific brands. This is influenced by factors such as taste shifts, population growth, rising income, and higher prices of substitutes.
Step-by-step explanation:
In the growth stage of the product life cycle, prices generally increase in order to solidify the market position of specific brands. This is because several factors contribute to a higher demand and greater popularity for the product, resulting in an opportunity for brands to raise their prices and capture more profit.One factor is a taste shift to greater popularity, which means that more people are inclined to buy the product. Additionally, as the population likely to buy the product rises, the demand increases, allowing brands to charge higher prices.Moreover, if the income of the target consumers of the product rises, it becomes a normal good and people are willing to pay more for it. Lastly, if the price of substitutes for the product rises, consumers are less likely to switch to other brands, enabling the specific brands in the market to increase their prices.In conclusion, during the growth stage of the product life cycle, prices increase due to a higher demand and market factors such as taste shifts, population growth, rising income, and higher prices of substitutes.