When Could an Agent Be Liable to a Third Party

question 4

Multiple Choice

When could an agent be liable to a third party?

• A)If the agent commits a tort,such as negligence.
• B)If the agent did not tell the third party they were acting for a principal.
• C)If the agent breaches their warranty of authority by acting outside their authority.
• D)In all of the above situations.
• E)In A and B only.

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Definitions:

Demand Function

A mathematical representation showing the relationship between the quantity demanded of a good and its price, along with other determinants.

Marginal Cost

Additional cost incurred by increasing product or service production by one unit, emphasizing the concept of incremental expenditure.

Constant Marginal Cost

A situation in production where the cost to produce one additional unit of output remains the same, regardless of the volume produced.

Reaction Function

In economic models, this function represents how one player's strategy responds to the strategies of other players in a strategic game.