The Rule of Mitigation of Damages Requires That a Party

question 6

Multiple Choice

The rule of mitigation of damages requires that a party injured by a breach of contract must:

• A) take any and all steps possible to reduce the damages that will be sustained because of the breach.
• B) discharge the contract before filing suit for breach.
• C) hire someone else to perform the contract.
• D) take reasonable steps to reduce the damages that would otherwise be sustained because of the breach.

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Definitions:

Long-Run Average Total Cost Curve

A curve that shows the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Declining Segment

A portion of a market that is experiencing a decrease in consumer demand or sales.

Inputs

Resources used in the production process to produce goods or services, including labor, raw materials, and capital.

Output

The total amount of goods or services produced by a company, industry, or economy over a given period.