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) ________ problem.

Question

Quizplus · Accepted Answer

Price escalation refers to the situation where a product becomes more expensive in a foreign market than in its home market, often due to additional costs such as shipping, taxes, and distribution expenses.

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