When Goods Are in the Possession of a Holder Who

question 79

Essay

When goods are in the possession of a holder who is neither the seller nor the buyer,the risk of loss can be passed on to the buyer or retained by the seller.Explain how.

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Definitions:

Substitutes

Goods or services that can replace each other in use, where an increase in the price of one leads to an increase in demand for the other.

Quota Rent

The earnings that accrue to the holder of the right to import or export a product due to trade quotas.

Missed Opportunity

A situation in which a potential gain is not realized because a different decision or action was taken.

Government Quota

A limit set by the government on the quantity of a good that can be produced or imported, often used to protect domestic industries.