Which of the Following Is NOT a Potential Disadvantage of Licensing

question 52

Multiple Choice

Which of the following is NOT a potential disadvantage of licensing relative to FDI?

• A) possible loss of quality control
• B) establishment of a potential competitor in third-country markets
• C) possible improvement of the technology by the local licensee, which then enters the original firm's home market
• D) All of the above are potential disadvantages to licensing.

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Definitions:

Marginal Cost

An adjustment in the total expenses resulting from producing one additional unit.

Weekly Wage

The amount of compensation a worker receives at the end of each week for their labor.

University

An institution of higher education and research, which grants academic degrees in various disciplines.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market without any close substitutes, holding significant market power.