In contract manufacturing, companies earn royalties by selling the rights to produce and sell their products.

Question

(1 point)
Responses

True

True

False

Answer 1

False. In contract manufacturing, companies typically engage another company to produce their products, and they may pay the contract manufacturer for these services. Royalties are more commonly associated with licensing agreements, where a company grants rights to use its intellectual property (like patents or trademarks) in exchange for royalty payments.