The Acquisition of a Foreign Subsidiary Is Commonly Considered by MNCs

question 21

True/False

The acquisition of a foreign subsidiary is commonly considered by MNCs because the cost is less expensive than establishing a new subsidiary of the same size.

---

Definitions:

Marginal Cost

The additional expense incurred for producing one more unit of a product or service.

Inverse Demand Curve

Describes the relationship between price and quantity demanded, showing price as a function of quantity.

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a good or service.