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The economic factors that affect a firm's external environment are ______.

Multiple choice question.
largely macroeconomic
primarily ecological
often unidentifiable
usually regional

User Mgadda
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1 Answer

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Final answer:

Economists deal with the problem of many changing factors in a market by considering various economic factors that affect a firm's external environment.

Step-by-step explanation:

When analyzing a market, economists deal with the problem of many changing factors by considering the various economic factors that affect a firm's external environment. These factors include the costs of labor and financial capital, proximity to suppliers and customers, quality of transportation and communication networks, level of taxes, and the competence and honesty of the local government. While environmental regulations are a factor, they typically account for only 1 to 2% of a large industrial plant's costs, making other factors more important in location decisions.

User Rmaxx
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