A Gucci bag sells for $120 in Italy and $240 in the United States due to the differences in the costs of distributing the product in the two countries. This phenomenon is called a(n)________.

Question

Quizplus · Accepted Answer

The phenomenon described in the question is known as price escalation, which refers to the increase in the selling price of a product due to additional costs involved in distributing it to different markets. In this case, the cost of distribution is higher in the US than in Italy, resulting in a higher selling price for the same product.

A Gucci Bag Sells for $120 in Italy and $240