To Exploit Monopolistic Advantages, an MNC Should

question 42

Multiple Choice

To exploit monopolistic advantages, an MNC should:

• A)acquire a competitor that has controlled its local market.
• B)establish a subsidiary or acquire a competitor in a new market.
• C)establish a subsidiary in a market where tougher trade restrictions will adversely affect the firm's export volume.
• D)establish subsidiaries in markets where competitors are unable to produce the identical product.

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Definitions:

Nondeductible Items

Expenses or items that cannot be subtracted from gross income to reduce taxable income according to tax laws.

Partnership Interest

An ownership share in a partnership that entitles the holder to a portion of the entity's profits and losses.

FMV

Fair Market Value, the price at which property would sell on the open market between a willing buyer and a willing seller.

Partnership Basis

The amount invested in a partnership by the partners, adjusted for additions, withdrawals, and the individual's share of partnership profits or losses.