BioSense Prosthetics was a leader in the prosthetic arm market and profits from it were very high.The firm developed a new computerized prosthetic arm that would render its previous prosthetics obsolete.It decided to withhold the new computerized prosthetic arm from the market.This will allow the firm to:
A) minimize its return on investment in developing each generation of the product.
B) make its products backward compatible.
C) avoid cannibalization of the sales of its current prosthetics.
D) build a larger installed base for the new computerized prosthetic.

Question

Quizplus · Accepted Answer

By withholding the new computerized prosthetic arm from the market, the firm can avoid cannibalization of the sales of its current prosthetics. This means that customers will continue buying the firm's current prosthetics instead of abandoning them for the new model. As a result, the firm can continue to generate high profits from its current prosthetic arm market.

BioSense Prosthetics Was a Leader in the Prosthetic Arm Market