Software companies have high fixed costs and low marginal costs. This means that if a software company sells its product in the global market
A. it will gain a large benefit from its fixed investment and generate higher profits.
B. the country in which the software company is located will suffer losses because the price of the software will rise with the additional worldwide demand.
C. the company will earn more money in the short run, but lose money in the long run as entry into other markets encourages more competition.
D. it will lose money because the additional expense of selling in the global market will add a large amount to fixed costs and add very little to revenues.
Answer: A
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