Albert Has a Contract to Buy 100 Tables from Bartholomew

question 22

True/False

Albert has a contract to buy 100 tables from Bartholomew at a price of $50 a table. Five days before Bartholomew is to deliver the tables, he calls Albert to say that he is sorry but $50 won't cover his costs, and he will now need at least $75 a table. Albert agrees, because he needs the tables for his special sale. The modified contract is enforceable even though Albert isn't getting any new consideration, so long as Bartholomew is acting in good faith and the agreement to the new price is put in writing.

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Definitions:

Equilibrium Value

The point at which the quantity of a good or service demanded equals the quantity supplied, resulting in market stability.

Opportunity Cost

Whatever must be given up to obtain some item.

Holding Currency

The practice of keeping money in the form of cash or liquid assets as opposed to investing or depositing it.

MPC

Marginal Propensity to Consume refers to the proportion of an increase in income that gets spent on consumption of goods and services, as opposed to being saved.