A third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the obligor is said to be an intended beneficiary.

When evaluating possible alternatives, consumers should look for (a) the highest quality alternative (b) the alternative with the greatest net benefit (c) the alternative that has the lowest price (d) the alternative that is most frequently chosen by others.

A restaurant sells pizza at a rate of $14.69/slice. Expenses for the restaurant include raw material for pizza at $9.69 per slice, $157.00 as monthly rental and $59.00 monthly as insurance. How many slices should the restaurant sell in a month to break even?

A manufacturer sells a particular product in both Brazil and the U.S.  In Brazil, the manufacturer has been selling 4,900 units per year of the product at a price of $200 and a contribution margin of 25 percent. For sales of this product in Brazil, calculate the breakeven sales level for a $20 price increase.  Show your work. In the U.S., the manufacturer’s price for this product is $400 and the contribution margin is 50 percent.  The manufacturer knows that, because of gray market commerce, every one-unit change of sales of this product in Brazil leads to a 0.15-unit sales change in the opposite direction in the U.S.  Given this information, recalculate the breakeven sales level in Brazil described in Part a. Show your work. Using the course material, describe the concept of a price corridor.  Then explain how the difference between the breakeven you calculated in Part (b) and the one you calculated in Part (a) is helpful for applying the price-corridor concept in this situation.