A Car Manufacturer and a Multinational Computer Technology Corporation Intend

question 3

Multiple Choice

A car manufacturer and a multinational computer technology corporation intend to combine their strengths to develop intelligent sound systems for cars.Assuming that both companies will have a moderate to high level of interaction,what would be the most suitable form of alliance to adopt?

• A) The firms should develop an R&D consortium, combining teams from both companies.
• B) The firms should create an equity joint venture, combining assets from both companies.
• C) The firms should create a licensing agreement to exploit the new application.
• D) The firms should develop production facilities to be shared between the partners.

---

Definitions:

Consumer Income

The total amount of income earned by consumers in an economy, including wages, salaries, benefits, and other income sources, influencing their buying power.

Demand Curve

A graph that shows the relationship between the price of a good and the quantity demanded by consumers at various prices.

Law of Supply

The economic principle stating that as the price of a good or service increases, the quantity supplied of that good or service will also increase, ceteris paribus.

Decreasing Opportunity Costs

A situation in which sacrificing less of one good to produce another becomes possible, often due to efficiencies or learning.