To Fully Benefit from Use of Foreign Raw Materials

question 49

Multiple Choice

To fully benefit from use of foreign raw materials:

• A) establish a subsidiary in a market where raw materials are cheap and accessible.
• B) sell the finished product to countries where the raw materials are more expensive.
• C) establish a subsidiary in a new market that can sell products produces elsewhere.
• D) A and B

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Definitions:

Simultaneous Consumption

The same-time derivation of utility from some product by a large number of consumers.

Specialized Inputs

Resources or materials that are tailored for specific tasks or industries, enhancing the efficiency and quality of production.

Rent-Seeking Behavior

Activities by individuals or firms aimed at securing economic gain without contributing to productivity, typically through political lobbying for favorable regulations or monopolistic advantages.

X-Inefficiency

The difference between efficient production levels and actual production due to mismanagement, lack of competitive pressure, or other organizational inefficiencies.