Baxter Publishing Sought to Reduce Expenditures Related to the Printing

question 162

Multiple Choice

Baxter Publishing sought to reduce expenditures related to the printing of books in its trade and educational market and contracted with a printing company in China. However, the publishing company soon realized that China has weak enforcement of intellectual property laws and that gray market books began appearing in the marketplace, which greatly affected Baxter's profits. The company found that it had little recourse against the contract manufacturer and learned a very difficult lesson in international marketing. This exemplifies the impact of _______ forces on international business.

• A)technological
• B)competitive
• C)ethical and social responsibility
• D)political, legal, and regulatory

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Definitions:

Output Increased

A situation where the production of goods or services in an economy rises.

Purely Competitive Market

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information, leading to firms being price takers.

Short Run

A time period in which at least one factor of production is fixed, limiting the ability of a firm to adjust its output.

Automatic Market Adjustments

The self-regulating nature of the marketplace that responds to supply and demand changes to reach equilibrium without outside intervention.