Which of the Following Is True of Licensing

question 67

Multiple Choice

Which of the following is true of licensing?

• A) Licensing is used when a firm possesses some tangible property but does not want to pursue a potential application itself.
• B) The firm does not have to bear the development costs and risks associated with opening a foreign market.
• C) It is an attractive option when a firm is interested in pursuing a foreign market and is ready to commit substantial resources to a foreign market.
• D) It is an attractive option for firms that have the capital to open overseas markets.

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Definitions:

Short-Run Industry Supply

The total quantity of goods that firms in a particular industry are willing and able to sell at different prices in a short period, with some factors held constant.

Total Cost Function

The total cost function is a mathematical representation that shows how total costs of production vary with changes in output level.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Marginal Costs

The increase in cost due to the production of one further unit of a product or service.