When a Person Makes a Contract as an Agent for Another

question 21

Multiple Choice

When a person makes a contract as an agent for another but lacks authority to do so,the contract:

• A) binds the principal but not the agent.
• B) binds the principal and the agent.
• C) does not bind the principal.
• D) none of the above.

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Definitions:

Market Power

The ability of a firm or group of firms to influence or control the terms and conditions of the market to their advantage, often through controlling supply, manipulating prices, or creating barriers to entry.

Technologically Progressive

A characteristic of firms or economies that consistently adopt and implement new technologies, leading to growth and development.

Herfindahl Index

A measure of market concentration, calculated by summing the squares of the market shares of all participants in the market.

Market Shares

The portion of a market controlled by a particular company or product, typically expressed as a percentage of the total market.