The theory states that when an aspect of the market makes a transaction less efficient than it could be, a company will undertake foreign direct investment to internalize the transaction and thereby remove the efficiency-reducing aspect.

Market imperfections

Explanation:

  The market imperfection is one of the type of theory in which the both the customer and the producer can easily influence the production and also the price of the specific product in the market.

 In this type of imperfect market the information about the products are not disclosed and this type of theory is widely used by the sellers for the purpose of earn maximum amount of profit.

According to the given question, the  market imperfection theory basically makes the less efficient transactions and the company start adopting the direct investment process.

 Therefore, Market imperfection is the correct answer.    

answerblank(1); fixed interval; blank(2) fixed ratio;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.