Global expansion of sport apparel is linked to which cost factor?

• A. Cheaper labor and manufacturing costs
• B. Higher wages
• C. Tariffs
• D. Limited materials

Answer: (A)

The key idea is why brands spread production beyond their home country: to lower overall production costs. When labor and manufacturing costs are cheaper abroad, firms can cut the cost per unit of clothing, which makes it possible to offer competitive prices globally, maintain margins, and meet growing demand around the world. This cost advantage often drives firms to offshore or outsource production, set up global supply chains, and optimize for efficiency across multiple regions.

While other factors like tariffs, higher wages, or limited materials can influence where production occurs, they are not the primary force behind the broad global expansion of sport apparel. Higher wages increase production costs, tariffs can raise the price of imported goods and complicate sourcing decisions, and limited materials constrain production capacity. But the main pull that explains widespread cross-border manufacturing is the opportunity to reduce labor and manufacturing costs.