Question

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Why do MNCs produce goods globally?

• A. To get the advantage of skilled labour from all around the world
• B. To reduce cost of production and increase profits
• C. To provide financial support to the country’s government
• D. To create a vast customer network

Answer 1

Answer: (A), (B), (D)

To create a vast customer network

Multinational companies operate in more than one country. They try to reduce the cost of production by using cheaply-priced raw materials and low-cost labour to produce goods. For example, a company may buy raw materials from China, where they can be obtained cheaply, hire labour from India to get access to cheap yet skilled labourers, and sell the final product all around the world. This helps them increase profits and cater to a number of customers.