What Will Be the Consequences If a Sells a Particular

question 7

Multiple Choice

What will be the consequences if A sells a particular item to B under a fundamental common mistake and B subsequently sells that item for value to a third party C, who is unaware of the mistake?

• A) A will be barred from invoking the doctrine of mistake and the item will remain with C.
• B) The item will remain with C, but B will have to transfer the price he received for the item from C to A.
• C) A will be allowed to repossess the item from C.

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Definitions:

Fixed Costs

Costs that do not vary with output.

Variable Costs

Costs that change as output levels change.

Marginal Costs

The additional cost incurred in the production of one more unit of a good or service.

Fixed Costs

Costs that do not change with the amount of goods or services produced, such as rent, salaries, or insurance.