Options:
- Smith Bus should be excused from performance under the clause for the rights on improper delivery
- Smith Bus should not be excused from performance because it did not act in good faith
- Smith Bus should be excused from performance under the test of commercial impracticability
- Smith Bus can exercise its right of anticipatory repudiation
Answer:
Correct answer is Option c.
<u>Smith Bus should be excused from performance under the test of commercial impracticability
</u>
Explanation:
In this case, Smith cannot fulfil the contract obligation due to an unforeseen event. Hence, Commercial impracticability shall apply.
Direct labor cost is wages that are incurred in order to produce specific goods or provide specific services to customers. The total amount of direct labor cost is much more than wages paid.
Given that 3 workers, working 8 hours in a day are paid $12. The total amount paid to workers are:
12x8x3=$288
The cost of direct labor will therefore be:
450-288
=$192
Answer: Please see below for answer
Explanation:
Jones
Advertise NOT to advertise
Smith Advertise 8,8 12,6
NOT to advertise 6,12 10,10
To show that advertising is a dominant strategy.
Here if smith advertises, the best option is for Jones to advertise too since Jones will be getting a high pay off of $8million. when Smithy fails to advertise, the best option is for Jones to stll advertise sinvehe will be getting a higher payoff of $12 million. The dominant strategy is for Jones to advertise.
In the same vein, if Jones advertises, the best option for smith is to advertise too since he will get a high pay off same with ones at $8million. and if Johns fails to advertise, Smith should still advertise since he will be getting a higher pay off of $12million than $6million making the dominant strategy for smith to be in favor of advertisement.
This shows that advertising is a dominant strategy as a higher payoff is guaranteed.
b) If the government places a ban on cigarette ads, both firms will receive $10 million as neither of them will be able to advertise , than when both firms advertise with a pay off of $8million. The two firms should favor the ban as they will receive a higher payoff if both do not advertise.
