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What does the passage suggest occurs after competition clutters the market with similar products?

Incorrect.

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In the following sentence, the passage explicitly states that the company can choose whether or not to remove the product from the market.

Incorrect.

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We know that the original product loses its market position. This suggests that while its sales decrease, the sales of its competitors increase.

Incorrect.

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The passage explicitly states that the market is saturated, or full.

Incorrect.

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The passage tells us that sales begin to dwindle, or decrease. However, this is not enough to conclude the company's profits have decreased, as profits depend on many other factors such as expenses and the company's other brands and activities. Remember, Inference Questions require that you make only a small step further from what is stated in the passage.

Great job!

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The passage tells us that the original product starts to lose its market position. This suggests that its sales decrease in relation to other products, whose sales increase accordingly.

Even if you don't know what market position means, the sentence states that sales begin to dwindle. Since this paragraph is about the life cycle of the original product, you can infer that this refers to the original product only.

Competing products force the original product's removal from the market.
Sales of both the original product and the competition's product decrease.
Enough room remains in the market for a competitor to enter and make a profit.
The company's profits decrease.
Sales of other companies' product increase and sales of the original product decrease.