Question

50 points

An electronics company is trying to decide how many new computers it should produce for export to China. Which factor would most likely cause the
company to produce a large number of computers?

A. Shipping costs to China have increased greatly in recent years. in

B. Chinese consumers believe that computer prices will rise in the
future.

C. The Chinese government has recently raised taxes on foreign
goods.

D. Few Chinese consumers are interested in buying foreign
computers.

Answer 1

Chinese consumers believe that computer prices will rise in the future.

Step-by-step explanation:

If Chinese consumers believe that prices will rise in future, they will try to buy more computers in the present in order to save on having to spend more money in future.

The company would therefore have to produce more computers in order to satisfy this demand.

The other options are incorrect because of the following below:

1. If few Chinese consumers are interested in foreign computers, the company would produce less to match the reduced demand.
2. If shipping costs to China have increased, the company will produce less so as to avoid as much shipping costs as possible.
3. If the Chinese government raises taxes on foreign goods, the company will produce and export less to China so as to incur less taxes.

Hence, if Chinese consumers believe that computer prices will go up in future, they would most probably buy more in the present which would make the company produce more.