Which of the following is NOT a significant barrier to exporting for small and medium-sized firms?

• A. Lack of knowledge about foreign markets
• B. Strict government regulations in foreign countries
• C. Excess domestic demand for their products
• D. High transportation costs

Answer: (C)

Verified step by step guidance

1. Step 1: Understand what constitutes a barrier to exporting. Barriers to exporting are factors that make it difficult or costly for firms to sell their products in foreign markets.
2. Step 2: Analyze each option to determine if it is a barrier to exporting. For example, 'Lack of knowledge about foreign markets' is a barrier because it limits a firm's ability to enter and compete in those markets.
3. Step 3: Consider 'Strict government regulations in foreign countries' as a barrier since such regulations can restrict or complicate the export process.
4. Step 4: Evaluate 'High transportation costs' as a barrier because they increase the cost of getting products to foreign buyers, reducing competitiveness.
5. Step 5: Reflect on 'Excess domestic demand for their products' and recognize that this is not a barrier to exporting. Instead, it indicates strong local demand, which does not hinder a firm's ability to export.