In a firm fixed price contract, if market prices for a purchased good or service _____ the stated contract price, the _____ bears the brunt of the financial loss.
A)rise above….purchaser
B)rise above….seller
C)fall below….seller
D)stay the same….seller
E)None of these answers.

Question

Quizplus · Accepted Answer

In a firm fixed price contract, the seller bears the brunt of any financial loss if market prices for a purchased good or service rise above the stated contract price. Therefore, if market prices rise above the contract price, the seller must still provide the good or service at the agreed-upon price, even if it means they are losing money.

In a Firm Fixed Price Contract, If Market Prices for a Purchased