Which of the Following Is Not a Disadvantage of Licensing

question 27

Multiple Choice

Which of the following is not a disadvantage of licensing?

• A)It may leave the international marketing functions to the licensee.
• B)Transfer costs.
• C)The initial toehold in the foreign market may not be a foot in the door.
• D)The licensor may create its own competitors.

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Definitions:

Long Run

A time period in economic analysis during which all factors of production and costs can be variable, allowing for full adjustment to changes in market conditions.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent or salaries.

Profit-Maximizing

The operational method a firm adopts to calculate the pricing and output that bring in the highest profit.