Which of these statements regarding the industry life cycle is true?

• A. Product innovation is least important during the growth stage.
• B. Industries typically experience rapid growth during the maturity stage.
• C. The decline stage of the industry life cycle is characterized by decreasing sales and profits.
• D. Entry of new firms is most common during the decline stage.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the industry life cycle stages: Introduction, Growth, Maturity, and Decline. Each stage has distinct characteristics related to sales, profits, competition, and innovation.
2. Step 2: Recall that during the Growth stage, industries typically experience rapid sales growth and product innovation is very important to capture market share.
3. Step 3: Recognize that the Maturity stage is characterized by slower growth, market saturation, and intense competition, not rapid growth.
4. Step 4: Note that the Decline stage is marked by decreasing sales and profits as the market contracts or technology changes, which aligns with the statement about decreasing sales and profits.
5. Step 5: Understand that entry of new firms is most common during the Introduction and Growth stages, not the Decline stage, where firms often exit the market.