Which of the Following Statements Best Differentiates Between Franchising and Licensing

question 72

Multiple Choice

Which of the following statements best differentiates between franchising and licensing?

• A)Licensing gives a company greater control than franchising over the sale of its product in a target market.
• B)Franchising is common in manufacturing industries while licensing is primarily used in service industries.
• C)Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property.
• D)Licensees must often meet strict guidelines on product quality, day-to-day management duties, and marketing promotions unlike franchisees.

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Definitions:

Marginal Rates

The additional or incremental tax rate applied to every additional dollar of income.

First Theorem

Likely refers to the First Fundamental Theorem of Welfare Economics, which states that competitive markets lead to an efficient allocation of resources under certain conditions.

Welfare Economics

Welfare Economics is a branch of economics that focuses on the optimal allocation of resources and goods to maximize the social welfare or well-being of the community.

Efficient Allocation

An optimal distribution of resources in an economy, where goods and services are distributed according to consumer preferences with minimal waste.