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DECLINE STAGE: The final stage of the product life cycle, characterized by a drastic drop off in profits. A company needs to decide how long to continue to support a product during this stage. Advertising and promotion can help maintain sales for a period of time. Ultimately, the cost-benefit tradeoff forces the business to discontinue the manufacturing of a product in this stage. Sometimes this happens quite rapidly and in some cases the product continues in this stage for many years.
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SHORT-RUN PRODUCTION ALTERNATIVES A firm faces three production options in the short run based on a comparison between price, average total cost, and average variable cost. If price is greater than average total cost, a firm earns an economic profit by producing the quantity that equates marginal revenue with marginal cost. If price is less than average total cost but greater than average variable cost, a firm incurs an economic loss, but produces the quantity that equates marginal revenue with marginal cost. If price is less than average variable cost, a firm shuts down production in the short run, incurring an economic loss equal to total fixed cost.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius looking to buy either several orange mixing bowls or clothing for your pet dog. Be on the lookout for fairy dust that tastes like salt.
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This isn't me! What am I?
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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"Be willing to have it so. Acceptance of what has happened is the first step to overcoming the consequences of any misfortune." -- William James, Psychologist
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AVC
Average Variable Cost
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