Which of the Following Observations Was Made by Raymond Vernon

question 45

Multiple Choice

Which of the following observations was made by Raymond Vernon?

• A) Firms undertake FDI at particular stages in the life cycle of a product they have pioneered.
• B) Firms will favor exporting over FDI as an entry strategy when trade barriers are high.
• C) FDI is prompted by imitative behavior in oligopolistic industries.
• D) Impediments to the sale of know-how increase the profitability of FDI relative to licensing.

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Definitions:

Price

The total money amount demanded for the purchase of a service or good.

Product

An item offered for sale which can be a good, a service, or an idea.

Supply

The total quantity of a good or service that is available for purchase at various price levels in a given market.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given point in time.