On February 21, Cara Wrote to Pandora Mfg

question 7

Multiple Choice

On February 21, Cara wrote to Pandora Mfg. asking for shipment of 100 swimsuits on 90-day credit. In the letter, she gave references that indicated that her store was financially sound. Actually she had bills that she could not pay and hoped to turn the business around with the summer swimsuit sales. Pandora shipped the suits on April 2; they were received April 15. Cara immediately put them on display and 27 were sold by April 30 when Pandora discovered that Cara had lied. Pandora could:

• A) recover 73 suits plus incidental damages.
• B) recover 10 suits provided that Pandora acted within 10 days of discovering the misrepresentation.
• C) recover no suits since it had been more than 10 days since delivery.
• D) recover 73 suits.

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Definitions:

Price Elasticity

A parameter that indicates the extent to which demand for a good is influenced by its price changes.

Demand Schedule

A table showing the quantity of a good or service that consumers are willing to buy at various prices.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers.

Perfectly Elastic

A demand situation where a small change in price leads to an infinite change in the quantity demanded.