Hughes and Martin Discussed the Possibility of Martin Entering the Employ

question 113

True/False

Hughes and Martin discussed the possibility of Martin entering the employ of Hughes as the general manager of Hughes's firm.A written contract was prepared and signed by the parties on December 1,1989.The contract provided for a salary of $3,000 per month,and specified that the contract was to run for a period of two years from January 2,1990.On December 28,1989,Hughes notified Martin that he was cancelling the contract.Martin sued Hughes immediately.
-When Hughes cancelled the contract,Martin was released from his obligation to perform.

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Definitions:

Average Total Costs

The total costs of production (fixed plus variable) divided by the total quantity of output produced, expressing the cost on a per-unit basis.

Economies of Scale

The savings that organizations achieve through their size of operation, where the expense per produced unit consistently decreases with an upscaling in operation.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's size or output increases beyond a certain point.

U-shaped

A description often used to illustrate how certain economic variables, such as average cost, behave, initially decreasing with increased activity and then increasing.