Long's Department Store Contracted to Buy 1,000 Drop-Waist Velour Dresses

question 43

Multiple Choice

Long's Department Store contracted to buy 1,000 drop-waist velour dresses in heather gray from Durham.Subsequently,Durham called and asked to ship mink-colored dresses instead of heather gray.Long agreed,in writing,to the change.Which statement is correct?

• A)The modification is not enforceable since there was no consideration for the change.
• B)The modification is not enforceable since the parties are merchants.
• C)The modification is enforceable.
• D)Whether the modification is enforceable depends on the gap-filler rule.

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Definitions:

Explicit Cost

The monetary payment made by a firm to an outsider to obtain a resource.

Accounting Profits

The net earnings of a company calculated according to generally accepted accounting principles, taking into account all explicit costs but not implicit costs.

Implicit Cost

Costs that represent the loss of potential gain from using assets in an alternative option rather than in their current use.

Implicit Costs

The opportunity costs of resources that are owned by the firm and used in production, not involving direct payment of money but affecting the firm's profitability.