In marketing its new product in a foreign nation, Mega Computer was surprised to see the very low prices on its local competitor's models. Subsequent investigation revealed that the domestic businesses had received money from the government. Mega now knows what a(n) ________ is.
A) subsidy
B) tariff
C) embargo
D) local content law
E) quota

Question

Quizplus · Accepted Answer

The situation described is an example of a subsidy, which is a financial benefit given by a government to a domestic business or industry in order to support and promote its growth and competitiveness. This can result in lower prices for the subsidized product, making it difficult for foreign competitors to enter the market.

In Marketing Its New Product in a Foreign Nation, Mega