Wonder Widgets Agrees to Sell Bill Buyer 10,000 of Its

question 38

Multiple Choice

Wonder Widgets agrees to sell Bill Buyer 10,000 of its "Grade A" widgets at a price of $3.00 per widget.After Wonder breaches the contract by failing to deliver,Bill buys substitute widgets at a price of $3.20 per widget.For this purchase,Bill incurs $200 in reasonable expenses and saves $100 in shipping expenses.Bill then sues Wonder for $2,200.What,if anything,can Bill actually recover?

• A) Nothing
• B) $200
• C) $2,100
• D) $2,200

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Definitions:

Total Revenue

The total amount of money received by a company from sales of its products or services before any expenses are subtracted.

Total Output

The total quantity of goods or services produced by a firm or economy.

Perfect Competition

A market structure characterized by a large number of small firms, a homogenous product, perfect information, and easy entry and exit, leading to firms being price takers.

Marginal Decision Rule

A principle stating that an action should be taken if, and only if, the marginal benefit of the action exceeds its marginal cost.