A written firm offer commits to providing up to 10,000 tubes of toothpaste over 45 days at $1 per tube. After 30 days, the price increases to $1.10. The retailer orders 6,000 tubes and later 4,000 more within the 45-day window. What price is the supplier permitted to charge for the toothpaste?

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Multiple Choice

A written firm offer commits to providing up to 10,000 tubes of toothpaste over 45 days at $1 per tube. After 30 days, the price increases to $1.10. The retailer orders 6,000 tubes and later 4,000 more within the 45-day window. What price is the supplier permitted to charge for the toothpaste?

The key idea is how price interacts with when deliveries occur under a firm offer. A firm offer keeps the offer open and binding for the stated period, but it doesn’t necessarily lock the unit price for every portion of the order if the price itself changes during that period and deliveries happen in two phases.

In this case, the price is $1 per tube at the start, but after 30 days the price goes up to $1.10. The retailer places two deliveries within the 45-day window: the first for 6,000 tubes, the second for 4,000 tubes. The first delivery occurs while the price is still $1, so it costs 6,000 × $1 = $6,000. The second delivery occurs after the price has risen, so it costs 4,000 × $1.10 = $4,400. Combined, the total is $10,400.

If all 10,000 tubes had been delivered before the price increase, the total would be $10,000; if all were delivered after the increase, it would be $11,000. The given timing produces the $10,400 result.

A written firm offer commits to providing up to 10,000 tubes of toothpaste over 45 days at $1 per tube. After 30 days, the price increases to $1.10. The retailer orders 6,000 tubes and later 4,000 more within the 45-day window. What price is the supplier permitted to charge for the toothpaste?

Prepare for the MBE Contracts Test with comprehensive questions and detailed explanations. Utilize our resources to bolster your understanding and confidence. Pass your exam with expert strategies and guidance!

A written firm offer commits to providing up to 10,000 tubes of toothpaste over 45 days at $1 per tube. After 30 days, the price increases to $1.10. The retailer orders 6,000 tubes and later 4,000 more within the 45-day window. What price is the supplier permitted to charge for the toothpaste?

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