Give the merits and demerits of exporting and importing.

Solution

Merits of exporting and importing is :

1. Easiest way of getting entry into international market.

2. It is less complex.

3. It requires less investment.

4. Exposure to risk is nil.

Demerits of exporting and importing :

1. It involves additional cost in the form of packaging, transportation and insurance costs.

2. Exporting is not a feasible option when import restrictions exist in a foreign country.

3. The export firms do not have much contact with the foreign market.

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