Business Format Franchising Often Is Used in the Marketing of Services

question 20

Multiple Choice

Business format franchising often is used in the marketing of services for all of the following reasons except:

• A) Provide scale economies.
• B) Harness entrepreneurial spirit.
• C) Help solve standardization problems.
• D) A close business relationship between franchisee and franchisor is unnecessary.
• E) Takes advantage of the drive and motivation associated with independently owned businesses.

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Definitions:

Monopoly Market Positions

Situations where a single firm dominates the market, either in terms of sales, market share, or influence on the product itself.

Interest-Cost of Funds Curve

A graphical representation that shows the relationship between the cost of borrowing and the amount of funds borrowed.

Optimal R&D Expenditure

The ideal amount of money a firm or economy should spend on research and development activities to achieve the best economic outcome.

Upsloping Line

In a graph, a line that rises from left to right, illustrating a positive relationship between two variables.