Multiple choice

The obstacles for an industry to compete with more established foreign firms are due to:

  1. Lack of know-how and technology

  2. Lack of Capital and initial small level out put

  3. Lack of know-how and initial small level of output

  4. Lack of flexibility.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

New industries in developing countries face two critical disadvantages against established foreign firms: (1) lack of technical know-how and modern technology, and (2) inability to achieve economies of scale due to initially small production levels. Both factors combine to make them uncompetitive. Option C correctly captures both these constraints.

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