The product life cycle has a significant impact on costs and profits.

Question

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The product life cycle includes various stages such as introduction, growth, maturity, and decline. Each stage has a different impact on costs and profits. During the introduction stage, costs may be high due to research and development, marketing, and setting up production. Sales may be low, resulting in losses. In the growth stage, sales increase, and costs may be reduced due to economies of scale. Profits may start to be generated. In the maturity stage, sales may plateau, and competition may increase, resulting in price reductions and lower profits. Finally, in the decline stage, sales decrease, and costs may increase due to reducing production, resulting in further losses or minimal profits. Understanding the product life cycle is crucial for managing costs and profits effectively.

The Product Life Cycle Has a Significant Impact on Costs