If an Airport Decides to Expand by Building an Additional

question 208

Multiple Choice

If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, then the expansion would provide ________ to the airlines.

• A)economies of scale
• B)diseconomies of scale
• C)higher average costs but lower total costs
• D)higher marginal costs but lower total costs

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Definitions:

Liability of Foreignness

This concept describes the challenges and additional costs that companies face when entering and operating in foreign markets, as opposed to their home countries.

Ethnicities

Refers to categories of identity based on cultural traditions, language, and ancestral origins.

Equity Modes

Different methods a company can use to enter and operate in foreign markets, typically involving significant ownership and long-term commitment, such as joint ventures or subsidiaries.

Large Investment

Substantial financial commitment in assets or projects expecting future returns.