A potential advantage to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Question

Quizplus · Accepted Answer

This statement is true. By expanding into international markets, a company can take advantage of excess capacity in their production facilities and reduce per-unit costs by increasing economies of scale. Additionally, operating in multiple markets can help spread risk and reduce reliance on any one market.

A Potential Advantage to Initiating, Continuing, or Expanding International Operations