Final answer:
The term 'increase' within the context of the product life cycle likely refers to the growth stage, where sales and demand for a product grow due to factors like taste shift, population growth, income rise, and higher prices of substitutes.
Step-by-step explanation:
The question refers to the product life cycle, a concept in business and marketing that describes the stages a product goes through from its introduction to the market until it is removed from the shelves. Increase in this context likely refers to the growth stage of the product life cycle, where sales and profits begin to climb. This is due to several factors such as a taste shift to greater popularity, an increase in the population likely to buy, rise in income levels (for normal goods), and the rise in price of substitutes.
In the context given, diminishing returns refer to the stage where production efficiency decreases as more workers are hired. However, this seems to pertain more to the Law of Diminishing Returns in economics rather than the product life cycle stages directly. Regardless, in terms of the product life cycle, the growth stage is indicated by an increase in demand due to improvements in technology or product quality, which can shift demand and supply curves to the right.