At Prices Above a Consumer's Reservation Price

question 18

Multiple Choice

At prices above a consumer's reservation price:

• A) the opportunity cost is less than the benefit from having the good.
• B) the opportunity cost is greater than the benefit from having the good.
• C) the buyer will purchase the good.
• D) the willingness to pay is greater than the price.

Understand the doctrine of respondeat superior and its application in liability cases involving employees or agents.

Recognize the requirements for properly terminating an agency relationship and the importance of notice to third parties.

Differentiate between expressed agency, implied agency, apparent agency, and agency by ratification.

Identify the roles and obligations within an agency relationship, including those of agents and principals.

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Definitions:

Cash Discount

A reduction in invoice amount by a seller as an incentive for early payment by the buyer.

Net 30

A payment term that indicates the full payment is due 30 days from the invoice date.

Wholesalers

Businesses that buy goods in bulk from manufacturers to resell them, typically to retailers, in smaller quantities.

Retail List Price

The price at which a product is sold to the public, suggested by the retailer.