Final answer:
The stage where sales increase at a decreasing rate and focus is on cost competition is the Maturity stage. This occurs as the product has widespread acceptance and the market begins to saturate, leading to intensified competition and strategic pricing to maintain market share.
Step-by-step explanation:
The correct stage of the sales life cycle of a product where sales continue to increase but at a decreasing rate, and competition focuses on cost is Maturity. During this stage, the product has been on the market long enough to be widely accepted, and the market may start to become saturated. The competition is intense, causing firms to optimize production costs and focus on differentiating their products to maintain their market share. This is a time for strategic pricing and marketing tactics, with emphases on customer retention and loyalty programs. In the growth stage, sales are increasing at an increasing rate, and firms often focus on building market share rather than price competition. However, as the market transitions to the maturity stage, the rate of sales growth slows down, market saturation begins to occur, and firms must become more cost-efficient to survive.
Businesses in a decreasing cost industry may experience lower costs as they expand, due to factors like improved technology or an increase in employee education. This is more common in high-tech industries. Market structure is also important to consider, as it dictates how competitive the industry is and influences how a firm competes in terms of cost.