What is the main regulatory risk associated with ABC's market development option?

• A. Differing regulations on toxic metal disposal.
• B. Tariff barriers in Country Y.
• C. Intellectual property infringement.
• D. Labor law differences.

Answer: (A)

Entering a new market brings regulatory risk from local rules, and for a market development option, rules governing how toxic metals are disposed of are often the most impactful. Different jurisdictions require specific disposal methods, permits, and reporting, and failing to meet these standards can lead to fines, delays, or costly changes to operations. Tariffs concern trade policy and affect costs rather than day-to-day compliance, while intellectual property and labor law differences are important but typically less central to the regulatory hurdles posed by environmental disposal rules in a new market.