Fact Pattern 10-1 Lulene Makes the Best Lemon Meringue Pies in Mississippi. So

question 421

Multiple Choice

Fact Pattern 10-1
Lulene makes the best lemon meringue pies in Mississippi. So Ellen, who owns Ellen's Old Fashion Cafe, contracts with Lulene to buy 50 pies per week at the price of $5.00 per pie.
Although Lulene took a class in business law, she forgot to get her agreement with Ellen in writing. Lulene and Ellen agreed during a chat. Lulene said: "I will supply you with lemon meringue pies for however long you want them at $5.00 per pie." Ellen said: "That's great, I'll take them." Both women were pleased.
Soon Lulene had a problem. Between a hurricane in Florida and brush fires in California, the price of lemons increased by 200%. Now, instead of the $5.00 per pie price she intended to charge Ellen, she feels she must charge $7.00 per pie to make a little profit.
Lulene calls Ellen with the bad news and Ellen has a fit. She tells Lulene that's too bad, but the deal is off. Lulene says, "That's what you think!" and goes to see Amanda, her attorney.
-Refer to Fact Pattern 10-1. Assume that Ellen says to Lulene that she would like blueberry pies rather than lemon pies. Assume that Lulene agrees to this and states that she will supply Ellen with all the blueberry pies she needs. This is known as:

• A) a rescission
• B) a restitution
• C) a material breach
• D) substantial performance
• E) accord and satisfaction

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Definitions:

Elasticity

A measure of the sensitivity of one variable to changes in another, commonly used to assess changes in demand or supply in response to changes in prices or income.

Demand Elasticity

Refers to the responsiveness of quantity demanded to a change in price.

Product Differentiation

Identifying unique features of a product or service to elevate its attractiveness to a chosen target group.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and differentiation.