Multiple choice

Generally in which stage of the product life cycle the cost per unit is the highest?

  1. Decline

  2. Maturity

  3. Growth

  4. Introduction
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Introduction stage has the highest cost per unit due to low production volumes, lack of economies of scale, heavy marketing expenditures, and initial setup costs being spread over few units. As products move through Growth and Maturity, volumes increase and per-unit costs decline. In Decline, volumes drop but fixed costs are often sunk, keeping unit costs lower than Introduction.

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