Pepsi Provides Heineken with Its Formula or Agrees to Supply

question 34

Multiple Choice

Pepsi provides Heineken with its formula or agrees to supply the cola syrup and Heineken adds carbonated water,packages it in appropriate containers,and sells it in the Netherlands.Pepsi cannot enter into a similar agreement with another firm to sell Pepsi in the Netherlands,and Heineken cannot alter the product,nor can it begin duplicating other Pepsi products (such as Lays Potato Chips) without a separate agreement.This is an example of:

• A)Franchising.
• B)Exporting.
• C)Licensing.
• D)Contract manufacturing.
• E)Management contracts.

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Definitions:

Monetary Exchange

The process of trading goods and services using money as a medium of exchange rather than direct barter.

Double Coincidence

A situation in a barter system where two parties each have something the other wants, allowing for an exchange without the need for money.

Limited Specialization

A situation in which individuals or entities focus on a restricted range of products or services to gain greater efficiency, but do not specialize to the extent that they produce only one good or service.

Primitive Societies

Early human communities characterized by simple social structures and technologies.