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schepotkina [342]
3 years ago
14

Culler Construction Company agreed with the City of Orange Key to build a road. The project was to begin on December 1. One week

after the work began, a hurricane struck the site, washing away so much land that the construction would be twice as expensive. As a result, Culler refused to continue the job, unless Orange Key paid a large sum in addition to the initial contract price. A promise by Orange Key to pay more than the original price is:_______
Business
1 answer:
KonstantinChe [14]3 years ago
6 0

Answer: D. Enforceable because Culler encountered unforeseen difficulties.

Explanation:

Contractual obligations can be changed if one or both parties encounter unforeseen circumstances that would significantly alter their ability to fulfil their part of the contract.

In this scenario, Culler Construction would incur a significantly higher cost to carry out their side of the contract than what was agreed. The contract can therefore be changed and this change would be enforceable by law. The higher offer by Orange Key is therefore legal and enforceable.

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Although the impact on the equilibrium quantity cannot be determined, a rise in demand and a decrease in supply will result in an increase in the equilibrium price. 1. Consumers now place a higher value on goods, and producers must charge a higher price to offer the goods; as a result, prices will rise for all quantities.

If demand increases at the same time as supply increases, as is the case in the scenario depicted, the new equilibrium price will be greater than the initial equilibrium price.

We therefore know that an increase in supply decreases equilibrium price and increases quantity, while a rise in supply increases equilibrium price and decreases quantity (and vice versa) (and vice versa).

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