Suppose That Regardless of the Amount of Production, a Subsidiary's

question 40

Multiple Choice

Suppose that regardless of the amount of production, a subsidiary's per unit costs are always less than a local firm's.If there are significant tariffs, in this case ________________is likely to be the lowest-cost method of supplying goods abroad.

• A) licensing
• B) subsidiary production
• C) direct exporting
• D) vertical integration

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Definitions:

Enzymes

Enzymes are biological catalysts that speed up chemical reactions in living organisms by lowering the activation energy, thereby playing essential roles in metabolic processes.

Richard Reid

Known as the "Shoe Bomber," a British terrorist who in 2001 attempted to detonate an explosive device hidden in his shoes while on an American Airlines flight.

Explosives

Substances that undergo rapid chemical reactions producing an immense amount of heat and gas, leading to an explosive force.

Aircraft

A vehicle designed for air travel that has wings and one or more engines.