Vernon Predicts That as the Demand for a New Product

Multiple Choice

Vernon predicts that as the demand for a new product starts to grow in other advanced countries, in the long run

A) the cost of labor in these advanced countries begins to increase.
B) it becomes profitable for foreign firms to invest in production facilities in the United States.
C) the firms in the United States begin to gain an absolute advantage.
D) it begins to limit the potential for exports from the United States.
E) the same product will begin to command a higher price.