An Upscale Jeweler Ordered Several Thousand Ounces of Gold a Few

question 101

Multiple Choice

An upscale jeweler ordered several thousand ounces of gold a few years ago when gold was priced at $650 an ounce.As of 2011 gold was averaging about $1,700 an ounce.This jeweler will be able to protect his competitive advantage,at least temporarily,due to which condition?

• A) Better expectations of future resource value
• B) Path dependence
• C) Causal ambiguity
• D) Social complexity

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Definitions:

Novation

The act of replacing an existing contract with a new one, wherein all parties agree to make the switch.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to secure immediate capital.

Assignment

Assignment refers to the transfer of rights or property from one party to another, commonly seen in contracts and legal agreements.

Novation

The act of replacing one obligation with another by mutual agreement, effectively creating a new contract.