Question

Which of the following is a distinct advantage of exporting? A. Absolute control over operations in the foreign nation B. It may help a firm achieve experience curve and location economies C. Avoids the threat of tariff barriers by the host-country government D. It is useful for bulk products and also in situations where transportation costs are high

Answer 1

Answer: B. It may help a firm achieve experience curve and location economies

Explanation: Exporting is defined as the act of conveying or sending commodities abroad or to another country, in the course of commerce. Exporting provides a distinct advantage to firms in that it helps them achieve experience curve (which posits that the more experience a business has in the production of product, the lower its costs in producing the product) and location economies (the production of a good or product under the most optimum settings that confers an added advantage in cost of productions over their competitors).