Firms competing on low costs should always locate in countries that have the cheapest labor.

Question

Quizplus · Accepted Answer

While low labor costs are definitely a factor in keeping costs down, firms should consider other factors such as transportation costs, infrastructure, access to raw materials, and government regulations. Additionally, locating in a country with the cheapest labor may also mean sacrificing quality, innovation, and brand reputation. Therefore, firms need to weigh all these factors before deciding on a location.

Firms Competing on Low Costs Should Always Locate in Countries