The size of an international market affects a firm's willingness to invest in R&D. Larger markets usually offer ____ potential returns and pose ____ risk for a firm's investments.

Question

Quizplus · Accepted Answer

Larger markets offer higher potential returns due to a larger customer base, increased sales volume and economies of scale. Additionally, larger markets usually offer less risk as there is a greater diversity of customers and more stable demand compared to smaller markets that are subject to greater fluctuations. Hence, C is the best choice.

The Size of an International Market Affects a Firm's Willingness