WGU D105 OA2 (Units 5–9) Comprehensive
QUESTIONS AND ANSWERS
1. In which stage of the Product Life Cycle (PLC) do profits typically peak before declining as
competition intensifies?
A. Growth
B. Introduction
C. Maturity
D. Decline
Answer: A
Conceptual Explanation: During the Growth stage, sales rise rapidly and profits usually
peak because economies of scale are reached before the intense price competition of the
maturity stage begins.
2. What term describes a company adding a higher-priced, higher-quality version of an
existing product to its line?
A. Line filling
B. Upward line stretch
C. Market penetration
,D. Product thinning
Answer: B
Conceptual Explanation: An upward line stretch involves adding items to the higher end
of the price/quality range to increase prestige or margins.
3. A service provider cannot store their ‘inventory’ for a later date. Which characteristic of
services does this represent?
A. Perishability
B. Inseparability
C. Heterogeneity
D. Intangibility
Answer: A
Conceptual Explanation: Perishability refers to the fact that services cannot be stored,
warehoused, or inventoried for future use.
4. Which type of product is a consumer likely to purchase frequently, immediately, and with
minimal comparison effort?
A. Shopping product
B. Convenience product
C. Specialty product
D. Unsought product
, Answer: B
Conceptual Explanation: Convenience products are relatively inexpensive items that
merit little shopping effort and are bought frequently.
5. A company uses a specific name, sign, or symbol to identify its products and differentiate
them from competitors. This is called:
A. Branding
B. Positioning
C. Packaging
D. Labeling
Answer: A
Conceptual Explanation: Branding is the process of using names or symbols to distinguish
a product from those of competitors.
6. When a firm introduces a new product at a very high price to recoup R&D costs quickly, it is
using which strategy?
A. Penetration pricing
B. Status quo pricing
C. Price skimming
D. Predatory pricing
Answer: C
QUESTIONS AND ANSWERS
1. In which stage of the Product Life Cycle (PLC) do profits typically peak before declining as
competition intensifies?
A. Growth
B. Introduction
C. Maturity
D. Decline
Answer: A
Conceptual Explanation: During the Growth stage, sales rise rapidly and profits usually
peak because economies of scale are reached before the intense price competition of the
maturity stage begins.
2. What term describes a company adding a higher-priced, higher-quality version of an
existing product to its line?
A. Line filling
B. Upward line stretch
C. Market penetration
,D. Product thinning
Answer: B
Conceptual Explanation: An upward line stretch involves adding items to the higher end
of the price/quality range to increase prestige or margins.
3. A service provider cannot store their ‘inventory’ for a later date. Which characteristic of
services does this represent?
A. Perishability
B. Inseparability
C. Heterogeneity
D. Intangibility
Answer: A
Conceptual Explanation: Perishability refers to the fact that services cannot be stored,
warehoused, or inventoried for future use.
4. Which type of product is a consumer likely to purchase frequently, immediately, and with
minimal comparison effort?
A. Shopping product
B. Convenience product
C. Specialty product
D. Unsought product
, Answer: B
Conceptual Explanation: Convenience products are relatively inexpensive items that
merit little shopping effort and are bought frequently.
5. A company uses a specific name, sign, or symbol to identify its products and differentiate
them from competitors. This is called:
A. Branding
B. Positioning
C. Packaging
D. Labeling
Answer: A
Conceptual Explanation: Branding is the process of using names or symbols to distinguish
a product from those of competitors.
6. When a firm introduces a new product at a very high price to recoup R&D costs quickly, it is
using which strategy?
A. Penetration pricing
B. Status quo pricing
C. Price skimming
D. Predatory pricing
Answer: C
