A firm is most likely to outsource services when
A)the cost of production is cheaper when done onshore.
B)the labor costs are high in the country where the outsourcing partner is.
C)the human capital is low in the country where the outsourcing partner is.
D)the effectiveness of services produced internally is less than that produced offshore.
E)the goods produced onshore are of better quality than those produced offshore.

Question

Quizplus · Accepted Answer

Outsourcing services is often pursued by firms when they can achieve higher effectiveness or efficiency by obtaining those services from external providers, especially if those services can be produced more effectively offshore than internally. This can be due to various factors, including specialized skills, technology, or cost advantages available with the outsourcing partner.

A Firm Is Most Likely to Outsource Services When