Ollie's Orchards Has Dealt for Many Years with Trixie Coppola

question 6

Multiple Choice

Ollie's Orchards has dealt for many years with Trixie Coppola, who owns a catering company that specializes in desserts. He always bills her on a net 30 days basis. Ollie has just loaded a $5,000 shipment of grapes for Trixie onto the truck, when he receives a call from Frank's Fruit farms. Frank tells him that Trixie is months overdue on her accounts with him, and that he's also heard a rumour that Trixie is about to go "belly up". Which of the following statements is FALSE?

• A)Trixie has done nothing that would allow Ollie to rescind the contract.
• B)Ollie can hold the goods until payment is made.
• C)Ollie can stop delivery on the basis that Trixie is insolvent
• D)If Ollie stops delivery and Trixie is not insolvent, he will have to pay her damages for any loss she suffers as a result.
• E)None of the above.

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Definitions:

Payoff

In game theory, the reward received by a player (for example, the profit earned by an oligopolist).

Dominant Strategy

A dominant strategy is the best course of action for a player in a game, regardless of what the other players do, always resulting in a better outcome for the player.

Game Theory

The study of strategic interactions among rational decision-makers.

Prisoners' Dilemma

A scenario in game theory where two players, each pursuing their own best interests, fail to achieve the best result for both.