What Does a Franchiser Do

question 69

Multiple Choice

What does a franchiser do?

• A) Owns the company's name and licenses others to sell its products
• B) Provides a licensing fee to the owner of the business
• C) Runs the day-to-day operations of the local business
• D) Agrees to sell the product according to the franchisee's requirements

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Definitions:

Purely Competitive Firm

A firm operating in a market where there are many sellers and buyers, products are identical, and there are no barriers to entry, leading to zero long-term economic profits.

Profit

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.

Total Fixed Cost

The sum of all costs required to produce the first unit of a product which do not change with the volume of output.

Zero Output

A scenario in production where no goods or services are produced, often due to complete shutdown of operations.