Question

How do MNC's manage to keep the cost of production of their goods low ? Explain with examples

Answer 1

MNC set up their industry depending on these conditions

1) cheap labour is available or not

2) closeness to the market

3) Where Government policy favor them

4) Where enough resources is available

In this way they keep their cost of production low.

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Answer 2

To keep the cost of production of their goods low, they also set-up their production centre near market, e.g. due to low cost of product (i.e., low labour cost, low raw material prices) MNCs set-up their factories in developing countries like India, China, Vietnam.

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