Question

As industry sales increase, profits in the growth stage will ____ because of the economies of scale associated with manufacturing and marketing costs

Answer 1

Profits in the growth stage will increase due to economies of scale.

Step-by-step explanation:

In the growth stage of an industry, as sales increase, profits will increase and benefit from the economies of scale associated with manufacturing and marketing costs. Economies of scale refer to the cost advantages that arise when a firm produces on a larger scale, leading to lower per-unit costs. As the volume of production increases, the cost per unit decreases, resulting in higher profits for the firm.