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alina1380 [7]
4 years ago
10

Fred Sweet runs dancing classes for middle-aged and elderly people. Some of Fred's customers lack physical coordination, and inj

uries from kicks, falls, etc. are common. Fred naturally fears that injured customers will sue him for negligence. Thus, he makes each customer sign a written contract containing a clause relieving Fred of all liability for injuries suffered during his dancing classes. However, fearful that he will lose business if potential customers become aware of his strategy, Fred states the clause in fine print and doesn't point it out to them. An injured customer sues Fred in negligence. Fred wants to defend on the basis of the clause in the contract. Which of the following is the biggest weakness in Fred's position? A. That Fred tried to use an exculpatory clause at all, because such clauses are invalid on public policy grounds. B. That Fred tried to use an exculpatory clause to relieve himself of negligence liability. C. That Fred has superior bargaining power, which makes the customer's acceptance of the exculpatory clause involuntary. D. That Fred used a fine-print exculpatory clause, which means that the customer lacked knowledge of the clause's existence
Business
1 answer:
Anuta_ua [19.1K]4 years ago
3 0

Answer: the correct answer is D. That Fred used a fine-print exculpatory clause, which means that the customer lacked knowledge of the clause's existence.

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Explanation:

What is given:

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5         0.25 0.25

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20          0.10 1.00

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Cost of overage or cost of a lost sale, Co = Cost per dozen - Salvage value = 6.35 - 2 = 4.35

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For the order quantity to become optimal it shoud be greater than or equal to the CF.

Let's see when this happens:

Demand (dozens) Prob Cumulative Prob

5                         0.25  0.25 < 0.456

10                         0.45  0.70 > 0.456

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20                         0.10          1.00

This hapeens for 10 dozens of order size.

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