Which of the Following Is True Regarding Any Deduction in Damages

question 25

Multiple Choice

Which of the following is true regarding any deduction in damages to which Roland is entitled?

• A) Roland is not entitled to any deduction because he was the breaching party.
• B) Roland is entitled to a deduction for the delivery expenses only if he can show that Selina agreed in writing to deduct those in the event of a breach.
• C) Roland is entitled to a deduction for the delivery expenses only if he can establish that Selina either knew or should have known that he would be unable to pay for the furniture.
• D) Roland is entitled to a deduction for the delivery expenses because that was a savings to Selina.
• E) Roland is entitled to a deduction for the delivery expenses because Selina breached the contract by not delivering the furniture to him and then pursuing an action for damages.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, reflecting extra profit.

Relatively Elastic

Refers to a situation in which the demand or supply for a good or service greatly responds to changes in price.

Tax Incidence

Refers to the distribution of the economic burden of a tax between buyers and sellers in the market.