Matt Accepts a Job Offer as a Chemical Engineer in the R&D

question 10

Multiple Choice

Matt accepts a job offer as a chemical engineer in the R&D department of Tulip Inc., paint-manufacturing company. After accepting the job offer, he signs an employment contract stating that the results of his research would be the sole property of the company. Matt comes up with an innovative paint formula which could withstand extreme temperatures. He receives a promotion and a handsome package for his work. However he is annoyed that the formula was not patented in his name. In the context of the given scenario, which of the following statements is true?

• A) The advances made by Matt on the job fall under the management and control of his organization.
• B) Matt's formula is his own intellectual property and he has the right to use it as he sees fit.
• C) Since the formula can be patented only by Matt, the company is legally required to pay him 30% of the total profits gained.
• D) The company can receive a fine up to $5 million for drawing a contract that is unenforceable.

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Definitions:

Perfectly Price Discriminate

A pricing strategy where a seller charges the highest price that each individual customer is willing to pay, thus capturing the maximum possible revenue.

Tying Contracts

A business practice where a seller requires the buyer to purchase a secondary product or service together with a primary product or service.

Price Discrimination

Price Discrimination is a pricing strategy where a firm charges different prices for the same product or service to different consumers, based on their willingness to pay.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive.