question_answer

  By setting up their production plants in India, MNCs such as Ford Motors tap the advantage not only of the large markets that countries such as India provide, but also the lower costs of production. Explain the statement.         

Answer:

                  To reduce their costs and maximise their profits, MNCs generally set up production plants where (i) They are close to their markets. (ii) Skilled / unskilled labour is available at a low cost. (iii) Availability of other factors of production is there. (iv) Government policies are favourable. Ford Motors has done the same by setting up a large plant near Chennai, as all the above conditions were met.