If the production technology is very inflexible and product requirements vary from one country to another,a firm has to set up

Question

Quizplus · Accepted Answer

Since the production technology is inflexible and product requirements vary from one country to another, setting up local facilities in each country is the best choice. This will ensure that the firm can cater to the unique demands of each market, while also reducing transportation costs. Setting up a few high-capacity facilities may not be feasible due to the inflexible production technology, and setting up many high-capacity facilities may not be cost-effective. Many local facilities would also add to the transportation costs. Therefore, option A is the best choice.

If the Production Technology Is Very Inflexible and Product Requirements