[Refused Furniture] Maya Arranged to Sell Furniture from Her Furniture

question 38

Multiple Choice

[Refused Furniture] Maya arranged to sell furniture from her furniture store to Luke for $3,000. Luke was required to give Maya a $500 deposit on February 1 and pay the remainder in monthly installments. Maya was to deliver the furniture by February 7. Luke did not pay Maya the deposit as promised on February 1. He asked her to wait until March 1, but she refused. She told him that the contract was canceled, and she refused to deliver the furniture at all. Due to a downturn in the economy, Maya was able to sell the furniture for only $2,500. Luke told Maya that she had no right to withhold or sell his furniture to another buyer, and that he was going to file suit. Maya also incurred $100 in additional advertising costs to advertise the furniture that Luke initially purchased. Maya saved $40 in delivery costs because she did not have to deliver the furniture to Luke and the subsequent purchaser picked up her own furniture.
-Which of the following statements is true regarding any right of Maya to recover the additional advertising fees she incurred from Luke?

• A) She is entitled to recover the damages only if she can show that Luke agreed to pay such damages in his contract with her.
• B) She is not entitled to recover the damages because she had no right to resell the furniture.
• C) She is entitled to recover the damages only if she can show that Luke has a history of breaching contracts of sale.
• D) She cannot recover the damages because consumer goods are involved.
• E) Maya will be able to recover the damages so long as they were reasonably incurred because of Luke's breach.

---

Definitions:

Monopoly Model

A market structure characterized by a single seller facing no competition, influencing prices and quantities of the product or service offered.

Economic Profit

Profit or loss calculated by subtracting both explicit and implicit costs, such as opportunity costs, from total revenues, providing a clearer picture of a firm's financial performance.

Marginal Revenue

The additional income that a firm receives from selling one more unit of a good or service, crucial for decision-making in production levels.

Natural Monopoly

A market condition where a single firm can supply a product or service to an entire market at a lower cost than what would be possible if there were multiple firms due to economies of scale.