Final answer:
Companies may stop producing and selling a product during its decline stage due to declining popularity, reduced market size, or as part of planned obsolescence strategies to stimulate ongoing demand.
Step-by-step explanation:
When a product enters the decline stage of the product life cycle, companies may indeed choose to discontinue production and sales if the costs of maintaining the product exceed the benefits. This can occur for various reasons such as a taste shift to lesser popularity, a decrease in the population likely to buy the product, a drop in income suggesting the product is a normal good, or a fall in the price of substitutes.
Additionally, companies may engage in planned obsolescence, where products are designed to have a limited usage life or become outdated due to technological advancements, ensuring continuous demand for new products. This practice helps companies to stay competitive in the market but can also lead to consumer dissatisfaction and environmental concerns.