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).
COMMUNIST
Under the Communist System the number of choices in the market is directly related to government involvement in markets.
Communist system is a market system wherein all market decisions are made by the government.
Answer:
Given that Honduras is a small economy in Central America, and it keeps a fixed exchange rate with the US, and capital is perfectly mobile, but interest rates are three percent in the US and six percent in Honduras, the explanation of the difference in these interest rates are as follows:
Honduras has a higher interest rate, meaning that its sovereign bonds pay higher values than the American ones, as well as its banks also pay higher interests on their investments compared to American banks.
This is so for a double reason: on the one hand, because the Honduran economy is less reliable than the American economy, which is larger and therefore more solvent and capable of overcoming eventual crises, with which the risk of default is less.
On the other hand, the Honduran economy is more dependent on foreign investment, so it must offer higher interest rates to attract such investments.
Natural monopoly tends to serve a whole market exclusively.
<h2>What is Natural Monopoly?</h2>
A natural monopoly is a sort of monopoly that frequently arises as a result of the high start-up costs or considerable economies of scale of operating a business in a particular industry, which can result in significant barriers to entry for potential competitors. In a certain sector or region, a corporation with a natural monopoly might be the exclusive supplier of a given good or service. In industries that need specialized technology, raw materials, or other elements to function, natural monopolies may develop.
<h3>Key Features of Natural Monopoly</h3>
- A natural monopoly is a special kind of monopoly that develops when there is only one company that can effectively provide the service in a particular area due to high start-up costs and considerable economies of scale.
- A business with a natural monopoly may be the exclusive supplier of a good or service in a given sector or region.
- Natural monopolies are permitted when one firm can provide a good or service for less money than any potential rival, but they are frequently very tightly controlled to safeguard consumers.
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