The Cost Escalation Problem Exists for Multinationals and Varies from Country

question 54

Multiple Choice

The cost escalation problem exists for multinationals and varies from country to country; the question is: How to set prices in different countries? Companies have three choices. One is to set a uniform price everywhere, two is to set a market-based price in each country, and three is to

• A) set a cost-based price in each country.
• B) set the transfer price at marginal costs + marginal revenue.
• C) set a final "cost plus" price in each country.
• D) vary the price/market/country on a daily basis to reflect consumer demand.
• E) let the market dictate price/country.

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