Which Form of Entry into a Foreign Market Requires the Greatest

question 66

Multiple Choice

Which form of entry into a foreign market requires the greatest commitment?

• A) direct exporting
• B) direct investment
• C) joint venture
• D) licensing
• E) indirect exporting

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Marginal Cost

The expenditure required to produce an additional unit of a product.

Short-run Cost Function

An economic formula that describes how production costs change in the short term with varying levels of output, assuming some inputs are fixed.

Average Cost

The cost per unit of output, calculated by dividing total costs by the total quantity of output produced.