A firm is most likely to outsource services when:
A)the cost of production is cheaper when done onshore.
B)the labor costs are high in the country where the outsourcing partner is.
C)the human capital is low in the country where the outsourcing partner is.
D)the effectiveness of services produced internally is lesser than that produced offshore.
E)the goods produced onshore are of better quality than those produced offshore.

Question

Quizplus · Accepted Answer

Outsourcing entails contracting with an outside vendor to provide a product or service to the firm, as opposed to producing the product using employees within the firm. It is usually done when the outsourcing partner can provide the service more cheaply than it would cost to do it internally, or the partner can provide it more effectively than it can be performed internally.

A Firm Is Most Likely to Outsource Services When