In Which of the Following Modes of Licensing Does the Firm

question 9

Multiple Choice

In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process?

• A) contract manufacturing
• B) management contracts
• C) direct investment
• D) joint venture production
• E) greenfield venturing

---

Definitions:

Complements

Goods that are often consumed together, such that an increase in demand for one leads to an increase in demand for the other.

Substitutes

Goods or services that can replace each other in use or consumption, such that an increase in the price of one leads to an increase in demand for the other.

Marginal Revenue

Marginal revenue is the additional revenue that a firm gains from selling one more unit of a good or service.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.