The Informational, Political, and Cultural Disadvantages That Foreign Firms Face

question 89

Multiple Choice

The informational, political, and cultural disadvantages that foreign firms face when trying to compete against local firms in the host country market are referred to as ________.

• A) opportunity costs
• B) liability of foreignness
• C) internalization disadvantages
• D) the burden of internationalization

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Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Marginal Revenue

The extra revenue generated through the sale of an additional unit of a product or service.

Marginal Cost

The additional total cost incurred from manufacturing an additional unit of a product or service.

ATC

Average Total Cost, which is the total cost of production divided by the quantity of output produced, including both fixed and variable costs.