To Fully Benefit from Economies of Scale, an MNC Should

question 43

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.
• 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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Definitions:

Multilateral Forum

A platform where three or more countries engage in dialogue and collaboration on issues of common interest.

Quotas

Limits set by governments on the amount of a specific good that can be imported or exported within a certain timeframe.

Tariffs

Taxes imposed by a government on goods and services imported from other countries, often to protect domestic industries or to generate revenue.

Restrict Imports

This is the imposition of government regulations or tariffs to limit the number and value of foreign goods entering a country.