Which of the Following Is True of Establishing Greenfield Venture

question 51

Multiple Choice

Which of the following is true of establishing greenfield venture in a foreign country?

• A) Greenfield investments are less risky than acquiring an existing company in a foreign market.
• B) An inherent degree of uncertainty is associated with a greenfield venture because of future revenue and profit prospects.
• C) Greenfield investments virtually eliminate the possibility of a more aggressive global competitor entering the market via acquisitions.
• D) Greenfield investments are quick to establish.

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Definitions:

Market Equilibrium

A situation in a market where the quantity demanded by consumers equals the quantity supplied by producers, leading to a stable price for the product or service.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, typically measured above the supply curve.

Well-Defined Property Rights

Legal parameters that establish ownership and delineate the use of resources or assets.

Mutually Beneficial Trades

Transactions between parties that improve the welfare of each participant.