Which of the following theories suggests that firms seek to penetrate new markets over time?
A)theory of comparative advantage
B)imperfect markets theory
C)product cycle theory
D)none of the above

Question

Quizplus · Accepted Answer

The product cycle theory suggests that firms seek to penetrate new markets over time, as a product reaches maturity in its domestic market, leading firms to seek new markets to sell their product. Choice A, the theory of comparative advantage, is a theory about trade between countries, not about firm behavior. Choice B, imperfect markets theory, deals with cases where markets are inefficient, and firms may seek to exploit market inefficiencies. However, this theory does not necessarily suggest that firms seek to penetrate new markets over time.

Which of the Following Theories Suggests That Firms Seek to Penetrate