Assume That Bubba Orders 15 Cases of BBQ Chips from Mays

question 24

Multiple Choice

Assume that Bubba orders 15 cases of BBQ chips from Mays Potato Chips for his restaurant,Bubba's BBQ.Mays ships 15 cases of regular chips by mistake.If Bubba decides to keep the regular chips,in spite of the nonconformity with the contract,then the destruction of the chips when a water pipe breaks in the food storage room will result in:

• A) Mays' having to bear the loss, because it shipped nonconforming goods to Bubba.
• B) Mays' having to bear the loss, because it failed to insure the chips.
• C) Bubba's having to bear the loss, because he accepted delivery of the nonconforming chips.
• D) Bubba's having to bear the loss, because it was a sale on approval contract.

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, measuring the benefit to producers from participating in the market.

Marginal Benefit

The extra value or enjoyment gained by using one more unit of a certain good or service.

Marginal Cost

This term describes the expense associated with manufacturing an additional unit of a particular item, crucial for understanding economies of scale and pricing.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.