Wonder Cat Licensing (Scenario)

question 10

Multiple Choice

Wonder Cat Licensing (Scenario)
Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC) . Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions.
-Which of the following statements most likely supports an ACC decision to enter into a licensing agreement with the Chinese firm?

• A) Royalties from toys and apparel would be initially minimal.
• B) The Wonder Cat brand's products could be easily counterfeited in other markets except in the Chinese markets.
• C) The Chinese government restricts complete ownership of local operations by foreign firms.
• D) China exclusively opts for high-control strategies such as FDI.

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Definitions:

Nominalizations

The conversion of verbs into nouns, often used in legal and formal writing to create a sense of abstraction or authority.

Verbs

Words that describe actions, states, or occurrences in sentences.

Nouns

Words that name people, places, things, or ideas.

Marginal Cost Curve

A graphical representation showing how the marginal cost of production varies with the quantity of output produced.