When a firm allows another enterprise to produce its products under license,the licensee bears the costs or risks.

Question

Quizplus · Accepted Answer

When a firm enters into a licensing agreement, the licensee takes on the responsibility of producing the products, which includes bearing the costs and risks associated with production. The licensor receives a royalty or fee in exchange for allowing the licensee to use their intellectual property and manufacturing processes.

When a Firm Allows Another Enterprise to Produce Its Products