Country X, a poor country, invents a revolutionary electronic product. The country markets this new product in other poor countries to garner large profits. This occurrence is against the idea of .

The options for this question are the following:

A. product life-cycle theory

B. Ricardo's theory

C. theory of absolute advantage

D. theory of comparative advantage

The correct answer is A. product life-cycle theory.

Explanation:

In Economics, there is a theory that explains the stages a product goes through with respect to its production and sales, known as the Theory of the life cycle of a product. It was defined by the American economist Raymond Vernon who assured that every product or service undergoes a similar evolution in the market. It also identifies 4 stages in that evolution:

This theory describes that evolution from the launch of the product to its final decline and disappearance. It may happen, however, that it is a matter of lengthening the life cycle of your product through different strategies: relaunching, updating, prolonging the maturity phase or even maintaining the commercialization of the product at that stage of decline even though demand is low.

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