This Type of Contract Is a High Risk Contract for the Contractor

question 147

Multiple Choice

This type of contract is a high risk contract for the contractor.

• A) actual price contract
• B) cost-reimbursement contract
• C) fixed-price contract
• D) BAFO contract

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Definitions:

Economic Profits

Profits exceeding the opportunity costs of all resources employed, used as a measure of efficiency and competitiveness in economic theory.

Limited Resources

Refers to the finite amount of resources available for production of goods and services, including labor, capital, and natural resources.

Market Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of that good supplied by all producers in the market.

Identical Firms

Refers to companies within the same industry that have similar methods of production, costs, and characteristics, making their products essentially indistinguishable.