Country X imposes heavy tariffs on imported manufactured goods. Company Y has determined that it could increase its

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Country X imposes heavy tariffs on imported manufactured goods. Company Y has determined that it could increase its profits in the long term by opening a factory in Country X to manufacture the goods that it currently produces in its home country for sale in Country X.

For Company Y's determination to be true, which of the following assumptions must also be true?


A. Company Y will be able to obtain all the necessary permits to open a factory in Country X.

B. Company Y currently produces no goods outside its home country.

C. A sustainable market for Company Y's goods currently exists in Country X.

D. Company Y's home country does not impose tariffs on imported goods.

E. Labor costs in Country X are lower than those in Company Y's home country.


OA C

Source: Manhattan Prep