When Companies Are Setting Prices in Different Countries,the Problem with Setting

question 14

Multiple Choice

When companies are setting prices in different countries,the problem with setting a market-based price in each country is that ________.

• A) it allows intermediaries in low-price countries to reship their products to high-price countries
• B) the company would earn the same profits everywhere, regardless of the cost structure
• C) this strategy might price the product out of the market in countries where costs are high
• D) this strategy would make the price too high in poor countries and not high enough in rich countries
• E) all of the above

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Definitions:

CISG

stands for the United Nations Convention on Contracts for the International Sale of Goods, a treaty providing a uniform international sales law.

Specific Exclusions

Provisions in a contract, insurance policy, or law that explicitly remove certain events, actions, or items from coverage or regulation.

Personal Use

Utilization of an item or service purely for an individual's needs or enjoyment, not for business or commercial purposes.

NAFTA

The North American Free Trade Agreement, a treaty between the United States, Canada, and Mexico designed to remove tariff barriers between the three countries.