__________________ affects the company's decision about where to source and market, based on lower cost of labor and other resources in one country relative to
Another.
A) Relative advantage
B) Absolute cost advantage
C) Comparative advantage
D) Competitive advantage
E) Sourcing advantage

Question

Quizplus · Accepted Answer

Comparative advantage is the ability of a company to produce a particular good or service at a lower opportunity cost than another company. This means that the company can produce a good or service more efficiently than another company, allowing it to sell goods at a lower price, thus gaining a competitive advantage. This concept is particularly relevant regarding the decision of where to source and market products based on lower cost of labor and other resources in one country relative to another. By sourcing from a country with lower labor costs or resources, a company can produce products at a lower cost, giving it a comparative advantage over other companies who produce the same product at a higher cost. Similarly, marketing products in countries with favorable market conditions can provide a comparative advantage by allowing the company to generate more sales and revenues than in other countries.

__________________ Affects the Company's Decision About Where to Source and Market