A Contract Has an Open Price Term If the Agreement

question 1

Multiple Choice

A contract has an open price term if the agreement:

• A) says nothing as to price.
• B) provides that the parties shall agree later as to the price and they fail to so agree.
• C) fixes the price in terms of some agreed market or other standard, as set by a third person or agency, and the price is not so set.
• D) All of these.
• E) None of these.

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Definitions:

Shutting-Down

The process a business undertakes to cease operations, often due to financial problems or a strategic decision.

Short Run

A period in which at least one factor of production is fixed, limiting the ability of a business to adjust fully to changes in market conditions.

Average Variable Costs

Costs that vary with the level of output, calculated by dividing the total variable costs by the quantity of output produced.

Shutting-Down

A short-run decision by a firm to halt production because operating would lead to a loss greater than the fixed costs.