Which of the Following Is True Regarding an Agent Who

question 62

Multiple Choice

Which of the following is true regarding an agent who is acting for an undisclosed principal?

• A) Failure to disclose the name of the principal is a form of fraud.
• B) The agent will bind both himself and the principal on most contracts.
• C) An undisclosed principal will bind only himself and not the agent.
• D) The third party will never be bound in a contract with the principal.

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Definitions:

Profit-maximizing

The business objective of achieving the highest possible profit from operations, achieved by balancing costs and revenues.

Factor Price

The payment received by a factor of production, for example, wages for labor, rent for land, or interest for capital.

Production Function

A mathematical representation of the relationship between inputs (such as labor and capital) and the maximum output that can be produced with those inputs.

Profit-maximizing

The process or strategy implemented by firms to determine the price and output level that returns the highest profit.