Purely domestic firms will be at a disadvantage to MNEs in the event of market disequilibria because:
A) domestic firms lack comparative data from its own sources.
B) international firms are already so large.
C) all of the domestic firm's raw materials are imported.
D) None of the above; domestic firms are not at a disadvantage.

Question

Quizplus · Accepted Answer

Domestic firms may lack access to comparative data from their own sources, such as international operations or partnerships, that multinational enterprises (MNEs) may have. This disadvantage may hinder the domestic firm's ability to respond to market disequilibria, which can put them at a disadvantage compared to MNEs. Options B and C may not always be applicable to all domestic firms and may not necessarily lead to a disadvantage in the event of market disequilibria. Option D is incorrect as domestic firms may face challenges in responding to market changes due to internal factors such as lack of resources, access to technology or expertise, or supply chain disruptions, among others.

Purely Domestic Firms Will Be at a Disadvantage to MNEs