The Accompanying Table Shows Cost Data for a Firm That

question 71

Multiple Choice

The accompanying table shows cost data for a firm that is selling in a purely competitive market. If the market price for the firm's product is $180, the firm will produce

• A)5 units and earn economic profits of $900.
• B)6 units and earn economic profits of $800.
• C)7 units and earn economic profits of $238.
• D)8 units and earn economic profits of $278.

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Definitions:

Commercial Impracticability

A legal defense that excuses the performance of a contract due to unforeseen and uncontrollable circumstances that make fulfillment excessively burdensome or impossible.

Financially Unsound Contract

A contract deemed as high-risk due to the financial instability or inability of one or more parties to fulfill their obligations.

Relieved from Performance

A legal condition where a party is released from fulfilling their obligations under a contract due to unforeseen circumstances.

Perfect Tender Rule

The perfect tender rule is a principle in sales law that allows a buyer to reject goods delivered by a seller if they do not meet all contract specifications.