Allen Calls PepsiCo, the Makers of Pepsi Cola, Saying That

question 77

True/False

Allen calls PepsiCo, the makers of Pepsi Cola, saying that he's an employee of Coca-Cola and he has the Coca-Cola secret recipe. The recipe is legendary as a closely guarded secret supposedly known to only a handful of people in the world. They arrange a meeting. Allen begins the meeting by stating that he acquired the recipe legally, and the PepsiCo representative says that she believes him and PepsiCo will buy it. Allen in fact stole the recipe. Since PepsiCo does not know specifically that the recipe was acquired improperly by Allen, the company cannot be guilty of misappropriation.

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Definitions:

Minimum

The lowest allowable or possible amount, level, or number in a given set of circumstances.

Allocative Efficiency

Refers to a state in which resources are distributed in a way that maximizes the net benefit to society, ensuring that goods and services are produced at the right quantities to meet consumer preferences.

Long-run Equilibrium

A state in which all factors of production are optimally distributed meeting the demands of consumers; also, a point where economic forces such as supply and demand are balanced.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit.