Question

A company that decides to engage in exporting as a way to increase economies of scale is basing this decision on which driver of international business activity?

a) Market expansion
b) Cost reduction
c) Risk diversification
d) Technological innovation

Answer 1

Exporting as a way to increase economies of scale is based on the driver of international business activity called Cost reduction.

Step-by-step explanation:

The company that decides to engage in exporting as a way to increase economies of scale is basing this decision on the driver of international business activity called Cost reduction. Exporting allows companies to take advantage of larger markets and achieve economies of scale, resulting in lower average production costs. By exporting their products, companies can reach a wider customer base and increase their sales volume, which leads to cost reduction and improved profitability.