Entrepreneurship and Small Business (ESB) Certification Practice Exam

True or False: Trademark licensing is beneficial only to consumers.

1. True

2. False

3. It depends on the situation

4. Only in niche markets

The correct answer is: False

Trademark licensing offers advantages not just to consumers but also to businesses and trademark owners. When a trademark is licensed, the trademark owner can expand their brand's reach and generate additional income through royalties from licensees. This enables the owner to leverage their brand's reputation and value without needing to directly manufacture or sell the product themselves. Licensees benefit as well; they gain the opportunity to market products under a recognized brand, which can help them attract more customers and enter the market more easily than if they were starting from scratch. This arrangement often leads to innovations and new product offerings, benefiting consumers through a wider variety of goods and services that enhance choices in the marketplace. The assertion that trademark licensing is beneficial only to consumers overlooks these significant benefits that enhance the business landscape, making the notion of exclusivity to one group inaccurate.