The ability to realize cost economies from global volume is greatest in the case of
A) products that need to be customized to local requirements.
B) commodity-type products that serve universal needs.
C) low-weight, high-value products that can be differentiated by global companies.
D) products that can be economically manufactured in small batches.
E) companies competing in industries where they face a large number of multinational competitors.

Question

Quizplus · Accepted Answer

Cost economies from global volume are greatest in the case of commodity-type products that serve universal needs. These products have a standardized, uniform output and require minimal customization, which makes it easy to produce them in bulk and achieve economies of scale. Examples of such products include basic food items like rice, wheat, and sugar, as well as consumer goods like electronics and automobiles.

The Ability to Realize Cost Economies from Global Volume Is