The 'Neighbour Principle' Formulated in the Decision of Donoghue V

question 28

Multiple Choice

The 'neighbour principle' formulated in the decision of Donoghue v Stevenson (1932) AC 562 provides:

• A)one must take reasonable care to avoid acts or omissions that are reasonably foreseeable to likely injure any person one would reasonably have foreseen would be so injured.
• B)a decomposed snail might reasonably be expected to enhance the flavour of ginger beer.
• C)manufacturers will not generally be liable to consumers for defects in their products because there is no contract between the manufacturer and the consumer.
• D)every person has a non-delegable duty not to cause harm to their next-door neighbour.

Understand the concept of a cartel and its operation in various markets.

Grasp the challenges associated with forming and maintaining cartels, including the role of group size.

Identify the effects of output and price in firm decision-making within oligopolies.

Comprehend the role of free trade and competition in oligopolistic markets.

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Definitions:

Fixed Expenses

These are costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance.

Margin of Safety

The difference between actual sales and sales at the breakeven point, indicating how much sales can decline before a loss occurs.

Variable Expenses

Costs that change in proportion to the activity or volume of a business operation.

Contribution Margin

The difference between sales revenue and variable costs; used to cover fixed costs and generate profit.