ECONOMICS (CBSE/UGC NET)

ECONOMICS

BUSINESS CYCLES

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

TRUE of FALSEA challenge of the post-maturity stage of the life-cycle is paying debts to lenders and suppliers when business is slowing down?

A	TRUE
B	FALSE
C	Either A or B
D	None of the above

Explanation:

Detailed explanation-1: -The post-maturity phase is the final stage of the business life cycle. Typically, the business has failed to respond to increased competition and is haemorrhaging market share. This phase is characterised by falling sales and loss of market share. The business soon becomes unprofitable and cash flow problems emerge.

Detailed explanation-2: -The maturity stage is when the sales begin to level off from the rapid growth period. At this point, companies begin to reduce their prices so they can stay competitive amongst the growing competition.

Detailed explanation-3: -During the maturity stage of the product life cycle, the sharp growth in sales begins to slow, and profits at the beginning of this stage decline.

Detailed explanation-4: -The business life cycle is the progression of a business in phases over time and is most commonly divided into five stages: launch, growth, shake-out, maturity, and decline.

There is 1 question to complete.