If the Cost of Replacing a Defective DVD Disk Once

question 27

Multiple Choice

If the cost of replacing a defective DVD disk once it has been shipped is $2.00, while the cost of 100% inspection prior to shipment is $.40 each, at what point is he indifferent between 100% inspection and shipment without inspection?

• A)0% defectives
• B)2% defectives
• C)5% defectives
• D)20% defectives
• E)30% defectives

---

Definitions:

Reformation

The legal process of modifying a contract or document to accurately reflect the true intentions of the parties involved.

Quasi Contract

An obligation imposed by law to prevent unjust enrichment, even though no actual contract exists between the parties involved.

Specific Performance

A legal remedy requiring a party to perform a specific act, often the fulfillment of contractual obligations, as opposed to paying damages.

Gross Negligence

An extreme lack of care that demonstrates a willful or reckless disregard for the safety or lives of others, significantly beyond ordinary negligence.