When the Cost of Transporting Finished Goods to Market Is

question 55

Multiple Choice

When the cost of transporting finished goods to market is high relative to their value, the key location criterion is ________.

• A)low rental or lease rates
• B)proximity to raw materials
• C)proximity to markets
• D)zoning regulations

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Definitions:

Imperfect Substitutes

Products or services that can replace each other to some extent but are not perfect substitutes due to differences in features, preferences, or qualities.

Transported

The act or process of moving goods or people from one place to another via various modes of transportation like vehicles, trains, ships, or planes.

Consumer Preferences

The subjective tastes and likes that govern the choices made by consumers regarding the purchase of various goods and services.

Purchasing-Power Parity

A theory that states that in the absence of transaction costs and barriers to trade, the exchange rate between two currencies should equalize the purchasing power of the two currencies.