Franchising

question 10

Multiple Choice

Franchising: 

• A) is the only imitation strategy discussed in the text.
• B) reduces risk of downside loss.
• C) is the same as the me-too strategy.
• D) reduces the amount of competition an entrepreneur will face.

---

Definitions:

MC

This stands for Marginal Cost, which is the cost of producing one additional unit of a product.

Maximizing Profits

The process of adjusting production and operational strategies to achieve the highest possible profit from business activities.

Shut-down Decision

The choice made by a firm about temporarily or permanently ceasing operations, often because operating costs exceed revenues at the current market price.

Short-run

A timeframe in economics during which at least one factor of production is fixed and cannot be changed.