A Form of Foreign Direct Investment, Where a Domestic Company

question 180

Multiple Choice

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a

• A) licensor.
• B) joint venture.
• C) foreign subsidiary.
• D) host company.

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Definitions:

Increasing Returns To Scale

Long-run average total cost declines as output increases (also referred to as economies of scale).

Barriers To Entry

Obstacles that make it difficult for new competitors to enter a market, such as high start-up costs or strict regulations.

Prisoners' Dilemma

A standard example of a game analyzed in game theory that shows why two individuals might not cooperate, even if it appears that it is in their best interest to do so.

Tit-For-Tat Strategy

A strategy in game theory where a player replicates the opponent's previous action, generally used in reference to cooperation or retaliation.