Great Year Tires Orders 50 Tons of Rubber from a Bill

question 34

Multiple Choice

Great year Tires orders 50 tons of rubber from a Bill, a rubber broker. The broker has a number of rubber plantations that it can deal with but does almost all of its business with Ritchie's Rubber Farm. The delivery of the rubber is due on September 1st. On August 1st, a fire destroys Ritchie's Rubber Farm.

• A) Bill's performance is excused due to impossibility of performance.
• B) Bill's performance is excused due to commercial impracticality.
• C) Bill's performance will not be excused if obtaining rubber from another plantation is reasonable and possible.
• D) Bill's performance will not be excused if he can get the rubber from another source even if a higher cost cuts his profit margin.
• E) Bill's performance will be excused even if Great year proves that rubber from other plantations is reasonably available.

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Definitions:

Long-run Supply Curve

A graphical representation showing the relationship between the price level and the quantity of output that producers are willing to supply, taking into account all factors of production can be varied.

Profitable Output

The production or output level from a business operation that generates a financial gain or profit.

Firm

An organization engaged in commercial, industrial, or professional activities, typically with the aim of earning a profit.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period when all factors of production can vary.