Privity of Contract Means That the Parties to a Contract

question 7

Multiple Choice

Privity of contract means that the parties to a contract:

• A)are the only persons who are entitled to release private information about each other.
• B)can acquire rights under a contract but cannot incur liabilities.
• C)must be over 18 years of age or have the written permission of a parent or guardian.
• D)are the only persons who can acquire rights and incur liabilities under a contract.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Equilibrium Quantity

The amount of goods or services that are bought and sold at the equilibrium price, where market demand meets market supply.

Consumer Surplus

The discrepancy between the total sum consumers are prepared and able to spend on a good or service and what they ultimately pay.