Raymond Vernon noticed that in the 1960s, the wealth and size of the U. S. market was a natural incentive to develop new consumer products. What theory did he propose based on this fact?
a. new trade
b. absolute advantage
c. mercantilism
d. product life-cycle
e. comparative advantage

The correct answer is letter "D": product life-cycle.

Explanation:

American economists Raymond Vernon (1913-1999) proposed the "International Product Life-Cycle" in 1966 to explain how goods and services are introduced in the market, reach a peak, to later be forgotten by consumers. According to Vernon, the cycle is composed of four (4) stages:

The introduction stage: successful development of a product and marketing efforts. The growth stage: sales increase, decrease in production costs and higher revenue as a result of the product being noticed by consumers. The maturity stage : wide recognition of the product which brings competition driving the company's efforts to remain the business stable. The decline stage: market saturation which leads to sales decline and the product to become unpopular.

The activity of providing goods and services involving financial and commercial and industrial aspects.