Suppose Le Jouet estimates the demand for toy trains in Russia as 45,000 toys per year. Based on the curves AVC and ATCsubsidiary, what is Le Jouet's best strategy? O Invest in a country risk analysis. O Establish a subsidiary factory in Russia. O License production technology to a Russian firm. Suppose that Le Jouet's fixed cost of managing foreign operations increased. Which of the following best describes how Le Jouet's decision making may change? The decision to license instead of forming a subsidiary will occur at a lower level of output. Licensing remains more efficient than the subsidiary at a higher level of output. O The subsidiary becomes completely inefficient at higher levels of output. The subsidiary remains more efficient than licensing at output levels of above 60,000 toy trains.
Suppose Le Jouet estimates the demand for toy trains in Russia as 45,000 toys per year. Based on the curves AVC and ATCsubsidiary, what is Le Jouet's best strategy? O Invest in a country risk analysis. O Establish a subsidiary factory in Russia. O License production technology to a Russian firm. Suppose that Le Jouet's fixed cost of managing foreign operations increased. Which of the following best describes how Le Jouet's decision making may change? The decision to license instead of forming a subsidiary will occur at a lower level of output. Licensing remains more efficient than the subsidiary at a higher level of output. O The subsidiary becomes completely inefficient at higher levels of output. The subsidiary remains more efficient than licensing at output levels of above 60,000 toy trains.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 9E
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