Which of the Following Is Characteristic of Master Franchise Arrangements

question 1

Multiple Choice

Which of the following is characteristic of master franchise arrangements?

• A) subfranchises to other independent businesses and thus assumes the role of the local franchisor
• B) The franchisee provides completely standardized business activities, replicated across diverse markets.
• C) franchise networks where franchisor provides a lump-sum payment to get started in a foreign market
• D) franchise networks that pay fewer royalties to franchisors

---

Definitions:

Income Effect

The modification of income for someone or within an economy, and its subsequent impact on how much of a good or service is sought after.

Engel Curve

A graph showing the relationship between a consumer's income and their expenditure on a specific good.

Beer Type

Classifications of beer determined by factors like flavor, color, brewing method, and origin.

Substitution Effect

The substitution effect occurs when consumers replace more expensive items with less expensive alternatives due to a change in relative prices.