In Competing in Foreign Markets, Companies Find It Advantageous to Concentrate

question 64

Multiple Choice

In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations, EXCEPT when

• A) there are significant scale economies in performing an activity.
• B) the costs of manufacturing or other activities are significantly lower in some geographic locations than in others.
• C) when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations).
• D) certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages.
• E) the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

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Definitions:

Equity Mutual Fund

A type of mutual fund that invests primarily in stocks, aiming to generate returns through equity ownership in companies.

S&P 500

An American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

Rate Of Return

The profit or deficit made on an investment during a specific timeframe, represented as a proportion of the original investment's value.

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.