What is the biggest attraction for businesses considering engaging in international business?

• A. Guaranteed protection from foreign competition
• B. Access to larger markets and increased sales opportunities
• C. Elimination of all government regulations
• D. Reduced transportation costs compared to domestic trade

Answer: (B)

Verified step by step guidance

1. Understand the key motivations behind why businesses engage in international business. These motivations often relate to growth opportunities, cost advantages, and competitive positioning.
2. Evaluate each option by considering common economic principles: 'Guaranteed protection from foreign competition' is generally not true because international markets often involve competition rather than protection.
3. Consider 'Elimination of all government regulations'—this is unrealistic since international trade usually involves navigating various regulations, not eliminating them.
4. Analyze 'Reduced transportation costs compared to domestic trade'—typically, international transportation costs are higher due to distance and complexity, so this is unlikely to be the biggest attraction.
5. Recognize that 'Access to larger markets and increased sales opportunities' aligns with the fundamental economic incentive for businesses to expand internationally, as it allows firms to reach more customers and increase potential revenue.