The monopolistic advantage theory states that:

Question

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The monopolistic advantage theory suggests that firms in oligopolistic industries with technical advantages over local firms are more likely to engage in foreign direct investment. This theory implies that firms with a monopoly domestically will not necessarily have an advantage in overseas investments, as stated in option C. Option A and D are incorrect because a firm having a monopoly or being the first to invest does not necessarily lead to a monopolistic advantage in overseas investment. Option E does not accurately reflect the monopolistic advantage theory because it states that firms in monopolistic industries have an advantage, rather than firms in oligopolistic industries.

The Monopolistic Advantage Theory States That