Which of the following is true of the basic entry decisions a firm must make before a firm contemplates foreign expansion?
A) The long-run economic benefits of doing business in a country are solely a function of the number of consumers in the market.
B) The attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country.
C) The costs and risks associated with doing business in a foreign country are typically higher in economically advanced and politically stable democratic nations.
D) The benefit-cost-risk trade-off is likely to be most favorable in politically unstable countries.
E) All the nation-states in the world hold the same profit potential for a firm contemplating foreign expansion.

Question

Quizplus · Accepted Answer

The attractiveness of a country as a potential market for an international business depends on weighing the benefits, costs, and risks associated with doing business in that country. The number of consumers in the market is a factor, but not the sole determining factor. The costs and risks associated with doing business in a foreign country are generally higher in politically unstable and economically less developed countries. The benefit-cost-risk trade-off is not likely to be most favorable in politically unstable countries. All nation-states do not hold the same profit potential for a firm contemplating foreign expansion.

Which of the Following Is True of the Basic Entry