The First Assumption That a Firm Makes When It Enters

question 4

Multiple Choice

The first assumption that a firm makes when it enters a foreign market is that it will be profitable. What is the second assumption?

• A)The firm can establish a competitive advantage in that market
• B)Competition exists at a reasonable level
• C)The infrastructure of the foreign country allows easy business
• D)No powerful developing country's champion is already present in that market

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Definitions:

Future Price

The anticipated cost or value of a good, security, or commodity at a specified future date, often used in the context of futures trading.

Downsloping Demand

This term illustrates a standard economic theory where the demand curve slopes downward, indicating that as the price decreases, the quantity demanded increases.

Upsloping Supply

Refers to a supply curve that slopes upwards, indicating that higher prices lead to a higher quantity supplied.

Excise Tax

A tax levied on specific goods or services, such as alcohol or gasoline, usually to discourage their consumption or to raise revenue for public purposes.