Which of the following is a "trade cost" that firms need
To consider when making offshoring decisions?
A)higher prices of utilities (electricity, fuel) in other countries
B)higher costs of construction of a plant in other countries
C)higher costs associated with poor communication and transportation
D)None of these is a "trade cost."

Question

Quizplus · Accepted Answer

Trade costs are the costs that firms must consider when deciding to move their production to another country. These costs include transportation costs, communication costs, and other costs associated with doing business in a foreign country. Option A and B are related to production costs and construction-related costs, which are not considered as trade costs. Option D is incorrect, as trade costs are an important consideration when determining the feasibility of moving production to a foreign country.

Which of the Following Is a "Trade Cost" That Firms