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Why is it a bad idea for Edward and his landlord to make an oral lease contract for $30,000? Suggest an alternative and explain how it is beneficial to an oral contract.
Excess Productive Capacity
The ability of a firm to produce more than is required at the current level of demand, often leading to underutilization of resources.
Unused Equipment
Equipment that is not currently in operation or being utilized in the production process.
Differential Cost
The difference in total cost that will result from selecting one alternative over another.
Differential Analysis
The area of accounting concerned with the effect of alternative courses of action on revenues and costs.
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