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EBK INTERNATIONAL ECONOMICS
7th Edition
ISBN: 9780134523866
Author: Gerber
Publisher: YUZU
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Chapter 4, Problem 8SQ
To determine
Explain Dunning’s OLI theory with the tradeoffs faced by GM.
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If firms are in a competitive market, firms use marginal cost=price as a price-setting rule. Why multinational firms do not follow the price-setting rule like the firms in the competitive market (or why exporting firms do not follow the price-setting rule)? Your answer should be based on the characteristic market and the internal economies of scale. What is the price-setting rule for multinational firms?
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EBK INTERNATIONAL ECONOMICS
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