Which of the following is a disadvantage associated with licensing?
A) The licensor has lower wages and prices.
B) The licensor may create its own competition.
C) The licensor has increased profit potential.
D) The licensor has complete control of the product.
E) The firm's reputation is improved if it selects a poor choice as a licensee.

Question

Quizplus · Accepted Answer

Licensing can create its own competition as the licensee may use the licensed technology or product to develop their own similar products, which can compete with the licensor's products. This can potentially harm the licensor's market share and profitability.

Which of the Following Is a Disadvantage Associated with Licensing