To use foreign factors of production, an MNC should:
A) establish a subsidiary in a new market that can sell products produced elsewhere.
B) establish a subsidiary in a market that has relatively low costs of labor or land.
C) establish a subsidiary in a market where raw materials are cheap and accessible.
D) participate in a joint venture in order to learn about a production process or other operations.

Question

Quizplus · Accepted Answer

By establishing a subsidiary in a market with relatively low costs of labor or land, an MNC can take advantage of cost efficiencies and use foreign factors of production for manufacturing or production processes. This will help the MNC to increase its profitability and competitiveness in international markets. Options A, C, and D may also be suitable strategies, but they are not directly related to using foreign factors of production.

To Use Foreign Factors of Production, an MNC Should