If the government imposes a minimum local content condition, how will it affect a company's purchasing policy?

Correct answer: Company may need to buy more from local suppliers

The direct answer is B: the company may need to buy more from local suppliers. A minimum local-content condition is a government rule saying that a specified part of a product or its inputs must come from within the country. Purchasing policy means the company’s decisions about what to buy, from whom, and from where. Step by step: the government sets a minimum percentage; the company checks its present sources; if foreign inputs are above the permitted level, it searches for local suppliers or increases local purchases; therefore its purchasing sources and policy may change. A is wrong because foreign purchasing would not always increase; it may decrease. B is correct because it directly follows the local-content requirement. C is unrelated: the rule does not make customer demand zero. D is also unrelated: a purchasing rule does not automatically stop machines. Memory cue: local-content rule means “buy locally up to the required minimum.”