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Question
Uvicon Inc. and Bionor Inc. are firms that compete against each other in the global market. Uvicon Inc. has a high level of fixed costs and high minimum efficient scale, while Bionor Inc. has a low level of fixed costs and minimum efficient scale. In this scenario, which of the following is true?
A. Uvicon Inc. will be better prepared to hedge against potential adverse moves in currencies than Bionor Inc.
B. Uvicon Inc. will benefit from centralizing its production activities and Bionor Inc. from decentralizing.
C. Uvicon Inc. will have more bargaining power over contract manufacturers than Bionor Inc.
D. Uvicon Inc. will be better enabled to adapt to changes in consumer demand in regional markets than Bionor Inc.
E. Uvicon Inc. will be better prepared to accommodate demands for local responsiveness than Bionor Inc.
Answer
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