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

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Definitions:

Flash Memory

A type of non-volatile storage that can be electronically erased and reprogrammed, used in USB drives, memory cards, and SSDs.

Flash Drive

A portable storage device using flash memory, commonly used for the transfer and storage of digital files.

USB Port

A standard cable connection interface on computers and electronic devices for data transfer and power supply.

Ethernet

A technology for networking that enables devices to communicate with each other by transmitting data over cables.