An Advantage of Licensing to a Company Is That It

question 33

Multiple Choice

An advantage of licensing to a company is that it ________, while the licensee gains production expertise or a well-known product without having to start from scratch.

• A) does not maintain the same level of control over product quality
• B) must send employees to work with the licensee in training, selling, and distribution
• C) might create a competitor
• D) gains entry to a foreign market at little risk
• E) requires significant financial investment

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Definitions:

Economic Activity

All actions that involve the production, distribution, and consumption of goods and services in an economy.

Tax Burden

The total amount of taxes that individuals or businesses must pay to the government.

Inelastic Demand

A market condition where the demand for a product does not change significantly with a change in its price.

Elastic Supply

A scenario in which the amount of a product available for sale markedly changes in response to its price adjustments.