In an Employment Contract, Agreements Not to Compete Are

question 48

Multiple Choice

In an employment contract, agreements not to compete are:

• A) illegal
• B) uniformly held to be in the public interest and therefore legal
• C) valid only if the restriction protects the employee
• D) valid, if the restriction is reasonable and necessary for the protection of the former employer

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Definitions:

Marginal Revenue

Earnings obtained from the sale of one more unit of a good or service.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, reaching a state of balance.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information, leading to price-takers behavior.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market equilibrium.