The existence of economies of scale suggests that:
A)FDI is a complement to exporting.
B)exporting can be preferable to FDI.
C)licensing local firms in the foreign market is preferable to exporting.
D)inherent disadvantages cannot be fully overcome.

Question

Quizplus · Accepted Answer

The existence of economies of scale suggests that exporting can be preferable to FDI. This is because economies of scale refer to the cost advantages gained by a company when it produces and sells more of a product. Therefore, if a company can achieve economies of scale through exporting, it may not need to invest in FDI to achieve the same cost advantages.

The Existence of Economies of Scale Suggests That