Ford believes that by producing its small cars in Mexico they can take advantage of lower wage rates in that country.By pursuing such a strategy,Ford is most likely to realize

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By producing small cars in Mexico and taking advantage of lower wage rates in the country, Ford is pursuing location economies, which refer to the benefits a firm derives from locating its operations in different countries based on factors such as lower labor costs, proximity to markets, and access to resources. This allows the firm to optimize its production costs and enhance overall profitability.

Ford Believes That by Producing Its Small Cars in Mexico