Suppose Target Decided to Lower the Price on All Shirts

question 407

Multiple Choice

Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative. Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________.

• A) increase; substitutes
• B) decrease; substitutes
• C) increase; complements
• D) decrease; complements

Differentiate between warranty of merchantability and warranty of fitness for a particular purpose.

Recognize the role and limitations of the "caveat emptor" principle in modern commercial law.

Apply the theory of product liability and understand the conditions under which a party can be held liable.

Understand the legal frameworks surrounding negligence, strict liability, and warranty disclaimers in product liability cases.

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Definitions:

Operating Activities

Activities that are directly related to the primary business operations, such as selling goods and services.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, reflected in a company's cash flow statement.

Financing Activities

Actions that result in changes in the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by an independent organization for global use.