Question

Which of the following is NOT a risk of exporting? Select one: a. Delegation of marketing activities to a local agent b. Location diseconomies c. Tariff barriers d. Transportation costs e. High manufacturing costs

Answer 1

Answer:

E. High manufacturing cost

Explanation:

Export involves the sales of goods and services to another country. It is part of the international trade whereby goods produced in a country are sold to other countries. Just like all business activities, there are risk involved. Risk of exporting is the likelihood that there will be a loss in the sales of goods and services to another country. Various risk factors includes tariff barriers, cost of transportation and so on.

However, high manufacturing cost is not a risk of exporting. High manufacturing cost is the increase in the cost of producing and manufacturing a certain good. When this increases or rather when it's high, the prices of the products manufactured also increases. So there is no potential loss posed by high manufacturing cost.

Answer 2

Answer:

High Manufacturing Costs

Explanation:

Exporting involves shipping goods (by sea or air, or road) to other countries. Manufacturing costs will be a concern in the country of production before the products are exported. One the products are completed only then will they be eligible for export and other factors will play a role, however manufacturing costs is not one of these factors as the product is already completed and ready to be exported.