Final answer:
Europe's stricter animal testing regulations affect U.S. companies by potentially limiting their access to European markets unless they adapt to these standards, which could entail additional costs and changes in research methods.
Step-by-step explanation:
Generally, Europe imposes stricter regulations on animal testing than the United States. This discrepancy in regulations can significantly impact U.S. companies that operate in the biotechnological, pharmaceutical, and cosmetics industries, among others. European regulations may limit the acceptability of products tested on animals, hence affecting the global operations and market access for U.S. companies.
When operating in European markets, U.S. companies may encounter challenges due to these stricter standards. In order to sell their products in Europe, they might have to adapt their testing methods to comply with European regulations, which could involve additional costs or changes in their research and development strategies. As a result, the correct answer to how Europe's restrictions on animal testing affect U.S. companies is: b) U.S. companies may encounter challenges in European markets.