Using Any Two of the Four Theories That Appear in Your

question 36

Essay

Using any two of the four theories that appear in your text,explain why companies engage in foreign direct investment.

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Definitions:

Average Total Cost

The total cost divided by the quantity of output produced; a measure of cost per unit of output.

Maximum Profit

The highest possible financial gain that a firm can achieve from its operations.

Deadweight Loss

The decrease in economic performance that happens when a good or service fails to meet or cannot attain its optimal distribution point.

Marginal Cost

The cost of producing one additional unit of a good or service, considering all variable resources used in production.