With ________ options, serving markets on two continents by building two plants instead of one gives a firm the option of switching production from one plant to the other as conditions dictate.
A) waiting-to-invest
B) growth
C) flexibility
D) learning

Question

Quizplus · Accepted Answer

Flexibility options refer to the ability of a firm to adjust production levels or locations in response to changing market conditions. In this case, having two plants on two continents provides a firm with the option of shifting production from one plant to the other as needed, giving them greater flexibility. This is especially valuable when market conditions change rapidly or unexpectedly. Waiting-to-invest options refer to the decision to delay investment until conditions are more favorable, growth options refer to a firm's ability to expand operations, and learning options refer to the value of gaining knowledge or experience. While these other options may be valuable, they do not directly relate to the benefits of having two plants for flexibility.

With ________ Options, Serving Markets on Two Continents by Building