An MNC Uses Which International Strategy for Entering a Foreign

question 101

Multiple Choice

An MNC uses which international strategy for entering a foreign market by purchasing another company already operating in the area developing synergistic benefits gained from acquiring strong complementary product lines and a good distribution network?

• A) licensing
• B) joint ventures
• C) production sharing
• D) exporting
• E) acquisitions

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Definitions:

Normal Profits

The level of profit that business owners consider satisfactory or "normal", essentially covering both explicit and implicit costs, including a normal rate of return on investment.

Accounting Profits

The total revenue of a business minus the explicit costs; it's the profit figure calculated according to generally accepted accounting principles.

Total Revenues

The overall income generated by a firm or economy from its business activities, including sales of goods and services, before any expenses are deducted.

Marginal Returns

The additional output that is produced by using one more unit of a variable resource, keeping all other inputs constant.