Question

Factors that enabels the mnc's to set up their productions unit explain

Answer 1

MNCs set up their production units in regions where they have access to cheap labour and resources like raw material, land etc. Due to availability of cheap resources, the production cost remains low and this result in maximum profit for the MNCs.

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Answer 2

Answer:

Multinational Corporations (MNCs) are production business companies with outlets and customers in several nations. They set up their offices and factories only in certain areas with certain available factors to save the cost of production and to gain more consumers and achieve higher profit. MNCs set up offices and factories after due consideration of the following factors:

1. A multinational corporation is set up in those areas where there is easily available raw material in abundance. This will save the cost of procuring raw material and transporting it to their site of manufacturing.
2. It is set up in an area which has good transportation facilities from the manufacturing area to the market area.
3. Another factor considered in setting up of an MNC is the easy accessibility to the market.
4. MNCs are also willing to set up offices and factories in those areas which have favorable government policies.
5. Availability of cheap labour is another factor MNCs must take into consideration. Without cheap labour the cost of production will increase and the selling price will increase too which will not be favourable to the MNC in a competitive market.