Why Have Some Companies Set Up Offshore Assembly Plants

question 57

Multiple Choice

Why have some companies set up offshore assembly plants?

• A) Nearness to raw materials
• B) Available marketing opportunities
• C) Inexpensive energy
• D) Low labour costs

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Definitions:

Supply-Side Market Failures

Situations where the supply side of a market does not allocate resources efficiently, often due to externalities or public goods problems.

Sellers

Individuals or entities that offer goods or services for sale in the market.

Cost-Benefit Analysis

A systematic approach to estimating the strengths and weaknesses of alternatives used to determine the best option through weighing the cost against the benefits.

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization.