AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
(A) Both A and R are true and R is the correct explanation of A.
MNCs set up production where labour and resources are cheap so that the cost of production is low and they can earn greater profits.
The textbook explicitly states: "MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits." This directly links A and R — R is the exact reason behind A, making option (A) correct.