As the global market for hearing products has become extremely competitive in recent months, Rinker Audio Products' newly appointed CFO, Neha Patel believes that the company should address its minimum efficient scale and attempt to lower it. Which of the following is a consequence of a low minimum efficient scale?
A. preventing a firm from utilizing capital equipment fully
B. necessitating centralized production in a single location or a limited number of locations
C. preventing a firm from accommodating demands for local responsiveness
D. increasing the unit cost of products
E. allowing a firm to hedge against currency risk by manufacturing the same product in several locations
Answer: E. allowing a firm to hedge against currency risk by manufacturing the same product in several locations
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International Business
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