As a Firm Expands into Overseas Markets, Information Problems and the Complexity

question 3

Multiple Choice

As a firm expands into overseas markets, information problems and the complexity of operating within many varied cultures and economies may result in

• A)constant returns to scale
• B)diminishing marginal returns
• C)declining long-run marginal cost
• D)diseconomies of scale
• E)economies of scale

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Definitions:

Infinitely Inelastic

Describes a situation where the quantity demanded or supplied does not change regardless of price changes.

Economic Rents

The excess payment made to a factor of production over and above what is needed to bring that factor into production, often seen as a measure of market inefficiency.

Aggregate

A total sum or amount made up of distinct components, often used in economics to refer to total output or income.

Equilibrium

An equilibrium where demand meets supply in the marketplace, stabilizing prices as a consequence.