Which of the Following Is a Disadvantage of Licensing for Technological

question 81

Multiple Choice

Which of the following is a disadvantage of licensing for technological firms?

• A) It is not appropriate for entering markets that pose substantial country risk.
• B) It requires high capital investment and the presence of the technological firm in the foreign market.
• C) It restricts flexibility in the foreign market due to the technological firm's ownership of key assets in the target market.
• D) It increases the risk of creating a future competitor.

---

Definitions:

Optimal Output

The level of production that maximizes a firm's profit or minimizes its cost, given its production function and market conditions.

Price to Clear

Price to Clear is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded, thereby clearing the market.

Profit Per Unit

The revenue obtained per unit of a product or service sold, minus the cost per unit.

Optimal Output

The level of production that generates the highest possible profit for a firm, taking into account costs and revenue.