To Fully Benefit from Economies of Scale, an MNC Should

question 12

Multiple Choice

To fully benefit from economies of scale, an MNC should:

• A) establish a subsidiary in a new market that can sell products produced elsewhere, which allows for increased production and thus possibly greater efficiency.
• B) establish a subsidiary in a market that has relatively low costs of labor or land.
• C) establish a subsidiary in a market where raw materials are cheap and accessible.
• D) participate in a joint venture in order to learn about a production process or other operations.

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