Preston Electronics is an MNE with facilities located in Taiwan, Singapore, and Germany. Preston gives its local operations the authority to adapt value activities to prevailing local economic, political, legal, and cultural conditions

Penetration pricing means charging a relatively low price for a product as a way to reach the mass market. The low price is designed to capture a large share of a substantial market. Thus, which of the following BEST describes penetration pricing in this case?

a. It tends to lower production costs. b. It recoups product development costs quickly. c. It tempts competitors to enter the market. d. It provides a large profit per unit sold.

A risk that affects only individuals or small groups and not the entire economy is called a

A) diversifiable risk. B) pure risk. C) speculative risk. D) nondiversifiable risk.