The Advantages of Using a Licensing Strategy to Participate in Foreign

question 10

Multiple Choice

The advantages of using a licensing strategy to participate in foreign markets include

• A)being especially well suited to the use of cross-market subsidization.
• B)being able to charge lower prices than rivals.
• C)enabling a company to achieve competitive advantage quickly and easily.
• D)being able to leverage the company's technical know-how or patents without committing significant additional resources to markets that are unfamiliar,politically volatile,economically uncertain,or otherwise risky.
• E)being able to achieve higher product quality and better product performance than with an export strategy.

Identify the reasons why monopolistic competitors and monopolists charge a price greater than the marginal cost of production.

Recognize the role of advertising in monopolistic competition to influence demand and address excess capacity.

Analyze the long-term economic profit outcomes for monopolistic competitors versus perfect competitors.

Describe the concept of excess capacity in monopolistic competition and its implications on production levels and profits.

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Definitions:

Dependent

A person, often a child or elderly family member, whose livelihood and financial support are largely provided by someone else, typically a family member.

Doctor Bills

Invoices or financial charges for medical services rendered by a physician.

Deductible

The amount paid out of pocket by the policyholder before an insurance company pays a claim.

Insurance Premiums

The amount paid by an individual or business for insurance coverage, typically charged monthly or annually.