Exam 16: International Pricing Strategy

Transfer pricing is a preferred form of taxation by governments of low-income countries.

One example of aggressive export pricing is

The U.S. government supports countertrade for the sale of weapons and aircraft.

Companies thus use a skimming strategy price the product above that of competitors, when competition is minimal.

Which of the following is a justification for setting a higher price in the home market than in the international market?

In which type of countertrade does the exporter agree to buy goods from a shopping list provided by the importer?

Approximately what percentage of total world trade is financed through countertrade transactions?

In a(n) _________________________, a third party, usually a barter agent or some other type of broker, creates accounts that represent trade credits for the respective parties, and companies trade in and out as necessary.

Setting prices higher in the ____________________ market than in the ____________________ market is justified by a strong local competition in the international market.

Setting prices higher in the ____________________ market than in the ____________________ market is justified by no cost advantages to producing overseas, such as economies of scale and labor to justify a lower price.

Why should a manufacturer not use even pricing in Turkey?

Multinational companies are affected by local government ____________________ to local manufacturers, in particular, to producers of agricultural products and to exporting firms.

_________________________ is currency that is accepted for payment by any international seller.

A foreign company that enjoys high prices and high profits at home as a result of trade barriers against imports can use those profits to sell at much lower prices in foreign markets in order to build market share at the expense of competitors with open home markets. This is known as monopoly pricing.

Which of the following is an advantage of countertrade agreements?

Governments use numerous strategies in their attempts to restrict the repatriation of profits by multinationals. One way that companies can bypass such restrictions is through the use of countervailing pricing.

Which type of currency is kept at a high artificial exchange rate, is often overvalued, and is controlled by the national government?

Countertrade agreements often provide a means of speeding up the negotiation process.

A manufacturer may charge different prices in different markets for the same product

It is often difficult for firms to keep track of product costs. This is attributed to which of the following?