An Option Agreement Is

question 53

Multiple Choice

An option agreement is

• A) a contract transferring the fee simple to a new owner.
• B) a contract by which the offeror of property promises to hold his offer open for a period of time during which the offeree can accept the offer and the property can't be sold to another.
• C) a contract by which an offeree promises to buy the property offered at a later date set in the contract.
• D) a contract that provides that a seller will retain the title in the property until the buyer has made all of the required payments.
• E) a contract that provides that a debtor will transfer title in property to a creditor as security for repayment of the debt.

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Definitions:

Marginal Cost

The extra production cost for creating an additional unit of a good or service.

Average Total Cost

Represents the total cost of production (fixed plus variable costs) divided by the total quantity produced, indicating the cost per unit of output.

Subsidized

Financial support extended by the government or another body to reduce the cost of goods, services, or activities to encourage more consumption or participation.

Natural Monopolist

A single provider of a good or service in a market, where the nature of the product or service makes competition impractical due to high infrastructure or start-up costs.