The Activity in Which an MNE Internalizes Its Globally Dispersed

question 33

Multiple Choice

The activity in which an MNE internalizes its globally dispersed foreign operations through a unified governance structure and common ownership.

• A) internalization
• B) externalization
• C) global integration
• D) none of the above

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor, in contrast to fixed costs which remain constant regardless of output.

Total Cost

The total of all costs associated with the creation of goods or services, encompassing both fixed and variable expenses.

Average Variable Cost

Average Variable Cost is the total variable costs (costs that change with the level of output) divided by the quantity of output produced, representing the cost of producing one additional unit of goods or services.

Marginal Cost

Expenses related to the production of an additional unit of any good or service.