Suppose that a Sony Playstation (manufactured in Japan) sells for a lower price

Question

Suppose that a Sony Playstation (manufactured in Japan) sells for a lower price in China than in the United States. What is the most likely reason for the difference in prices in the two locations?

a. China institutes price controls on goods and services sold within the country.

b. Shipping the Playstation to the United States is more expensive than shipping it to China.

c. The Playstation sold in China is different from the one sold in the United States.

d. Chinese citizens have a much stronger demand for the Playstation than U.S. citizens do.

e. Japan has a closer political relationship with China, and so China receives a discount on the Playstations compared to the United States.

Explanation / Answer

The most likely reason for the difference in prices in the two locations is that shipping the Playstation to the United States is more expensive than shipping it to China.

Since transportation cost of playstation is low for china than US,so price of playstation is more in US.

So correct option is b.

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