When Companies Are Setting Prices in Different Countries, the Problem

question 144

Multiple Choice

When companies are setting prices in different countries, the problem with setting a market-based price in each country is that ________.

• A) it allows intermediaries in low-price countries to reship their products to high-price countries
• B) the company would earn the same profits everywhere, regardless of the cost structure
• C) this strategy might price the product out of the market in countries where costs are high
• D) this strategy would make the price too high in poor countries and not high enough in rich countries
• E) it prevents the company from differentiating its products

---

Definitions:

Gains

Benefits or improvements, often resulting from investment, effort, or development in various contexts.

Age

The length of time that an individual has lived or a thing has existed.

Wernicke's Area

A region of the brain that is important for language development and comprehension.

Language

A system of communication using sounds or symbols that enables us to express our feelings, thoughts, ideas, and experiences.