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MATURITY STAGE: The third stage in the product life cycle, characterized by flattening of sales and decreasing profit margins. Advertising and promotion are used to maintain market share and to prevent the erosion of sales and profits. During this stage, the initial decline of a product begins and many businesses try to "re-invent" their products to prevent the upcoming decline stage. Many times the company finds new uses for an existing product (baking soda as a deodorizer), totally new markets (foreign countries), or a way to enhance the existing product to make it better and to re-start the life cycle. The television has gone through at least two life cycles, first from black and white to color and then from color to high definition (HD) and plasma. Along the way there were enhancements such as remote control, VCRs to complement them, and cable to help with reception.
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Lesson 12: Business Cycles | Unit 4: Causes
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Page: 19 of 26
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Three points about investment and business cycles:- First: Investment is sensitive to interest rates. Higher interest rates increase the cost of investment borrowing and discourages investment.
- Second: Interest rates rise and fall with the business cycle. During an expansion, interest rates rise enough to discourage investment, and trigger a contraction. During a contraction, interest rates fall enough to encourage investment and cause a new expansion.
- Third: Investment doesn't react immediately to interest rates. The production of capital goods takes time and does not respond instantly to interest rate changes.
Interest-rate-induced changes in investment seem to be a natural cause-and-effect part of business cycles.
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DEADWEIGHT LOSS The decrease in the sum of consumer surplus and producer surplus that results from the imposition of a tax. When a tax drives a wedge between demand price and supply price it disrupts what otherwise would be an efficient market equilibrium. Inefficiency arises because while a portion of the sum of consumer and producer surplus is merely transferred to government, a portion of this sum also disappears. The part that disappears is the deadweight loss and is an indicator of the inefficiency of the tax.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store seeking to buy either a flower arrangement with a lot of roses for your grandmother or a wall poster commemorating the first day of winter. Be on the lookout for poorly written technical manuals.
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Lombard Street is London's equivalent of New York's Wall Street.
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"The road to success is always under construction. " -- Lily Tomlin, Actress
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NEDO
National Economic Development Office
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