Lon's GPS Inc

question 76

Essay

Lon's GPS Inc., orders 500 Class A widgets to be installed in GPS units it is manufacturing. When delivery is made on Monday, the widgets delivered are Class
B. Lon's signs a receipt accepting the nonconforming shipment. The next day, Lon's installs some of the Class B widgets and finds that they perform with half the accuracy of the Class A widgets. What, if any, options does Lon's have?
In most cases when a shipment of nonconforming goods is accepted, the buyer may seek to adjust the price, if applicable, but forfeits the right to subsequently reject the goods. In this situation, however, the UCC provides that if nonconforming goods are accepted and the nonconformity is found to substantially impair the value of the goods, the buyer may in fact revoke acceptance if the buyer does so within a reasonable time.

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Definitions:

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain period of time.

Price Inelastic

A characteristic of a good for which the demand does not significantly change with a change in its price.

Agricultural Output

The total amount of agricultural products produced, including crops and livestock, within a specific period.

Price Effect

The price effect encompasses the impact of price changes on consumer behavior, specifically how variations in price influence the demand for goods and services.