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