Labor cost advantages gained by moving into a country with low wages may be short-lived because ________.
A)transport costs go up to cancel out the cost savings
B)tax increases cancel out all labor cost differentials
C)rivals adopt capital-intensive production methods
D)competitors follow leaders into low-wage areas

Question

Quizplus · Accepted Answer

Labor cost advantages gained by moving into a country with low wages may be short-lived because competitors follow leaders into low-wage areas, resulting in an increase in labor costs as demand for labor increases.

Labor Cost Advantages Gained by Moving into a Country with Low