A single-plant, multiproduct firm will introduce additional products
A) in order of diminishing price elasticities of demand.
B) until the marginal revenue from the last product introduced is equal to zero.
C) until 100 percent of unused plant capacity is employed.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

The introduction of additional products by a single-plant, multiproduct firm is not solely determined by the order of diminishing price elasticities of demand, the point where marginal revenue from the last product introduced is equal to zero, or the full employment of unused plant capacity. Factors such as market demand, production costs, strategic positioning, and competitive dynamics also play crucial roles in such decisions.

A Single-Plant, Multiproduct Firm Will Introduce Additional Products