Barbara Brown has hired Gerry Grey as her agent to purchase used machines for a manufacturing plant with instructions not to pay over $10,000 per machine
Gerry makes it clear that he is acting as agent for Barbara and makes a contract to purchase a machine for $15,000 from Rick Redd. When Barbara learns of it, she wants to cancel the contract. Which of the following statements is TRUE?
A) The contract with Rick is binding on Barbara because any limitations on an agent's authority not told to third parties are not effective.
B) The contract with Rick is not binding on Barbara because she did not sign it personally.
C) The contract with Rick is not binding on Barbara but it is binding on Gerry because he went beyond his authority.
D) The contract with Rick is not binding on Barbara because she did not ratify it.
E) The contract with Rick is binding on Barbara but she only has to pay $10,000 for the machine
A
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Explain the concept of covered interest arbitrage. Why does it occur?
What will be an ideal response?
Unfair competitive advantages occur when:
A) one competitor has an advantage others cannot purchase. B) market middlemen are displaced. C) information is equally distributed and transaction costs are low. D) firms are able to gather monopoly profits.