CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

The growth phase in the industry life cycle is characterized by ______.

I. high-volume producers
II. margins that are below average in the economy
III. companies consolidating to maintain profit margins
IV. lack of competition in the market
V. growing sales and significant profitability
Correct Answer: IV and V

User Contributed Comments 8

User Comment
katybo I would say increasing competition...
danlan2 Margins are above average in the economy?
MasterD Margins are above due to lack of and increasing competition. High profitability is a reason why companies enter the market to get a piece of the action.
ljamieson Think Google circa '04
hoyleng why high vol producers is incorrect?
poomie83 because the market is still adapting to the good and high volume production is not required at this stage
2014 Increase in volumes and High volume producers, both have different meaning.

Increase in volume as you know is growth stage
High Volume producers means companies in mature stage, who have survived shakeout stage, grown larger due to consolidation. Such producers are high volume producers. They don't care to capture market share but to protect their share. I hope this helps
khalifa92 text book says low compition, falling prices due to economies of scale, improving probitability and increasing demand.
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