Question

To exploit monopolistic advantages, an MNC should: a. acquire a competitor that has controlled its local market. b. establish a subsidiary in a market where tougher trade restrictions will adversely affect the firm's export volume. c. establish subsidiaries in markets where competitors are unable to produce the identical product. d. establish a subsidiary or acquire a competitor in a new market.

Answer 1

Answer: establish subsidiaries in markets where competitors are unable to produce the identical product.

Explanation: Monopolistic advantage involves acting in a manner of monopoly. This involves a situation whereby one party exclusively provides a particular product or service, dominating that market and generally exerting powerful control over it.

An MNC(Multinational company) that looks to exploit monopoly should establish subsidiaries in markets where their competitors are unable to produce similar products. This will make the market saturated with their products.

Answer 2

c. establish subsidiaries in markets where competitors are unable to produce the identical product.

Step-by-step explanation:

Multinational corporation is one that has assets and facilities in other countries except from its home country.

For example Procter and Gamble is originally from the United States but they have operations all over the world in other countries.

To develop a monopolistic advantage an MNC can set up subsidiaries in countries where they have competitive advantage in producing a product. Other competitors will not be a able to produce identical product at a viable cost.