Which of the Following Is True of Exporting

question 91

Multiple Choice

Which of the following is true of exporting?

• A) It is the least common strategic approach for a company making its first foray into the international marketplace.
• B) It includes the cost of establishing manufacturing operations in the host country.
• C) It does not need to pay import duties or face trade barriers.
• D) It helps a firm achieve experience-curve and location economies.

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Definitions:

Long-run Equilibrium

A state in which all economic forces such as supply and demand are balanced, and all firms are producing at a level where no new entrants will disrupt the market.

Minimum ATC

The lowest point on the average total cost curve, representing the most efficient scale of production for a firm.

Creative Destruction

A term coined by Joseph Schumpeter to describe the process by which old industries are destroyed and new ones are created as part of the evolution of capitalism.

New Firms

Entrepreneurial ventures that have recently been established in the market.