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Assume John agrees to sell 800 pounds of wheat to a flour mill on May 15 for $3 per pound. However, John refuses to deliver the contracted wheat because the market price then was $5 per pound. If true, the flour mill can recover _______ in damages from John.Multiple choice question.$1600$400$4000$800

Question

Assume John agrees to sell 800 pounds of wheat to a flour mill on May 15 for 3perpound.However,Johnrefusestodeliverthecontractedwheatbecausethemarketpricethenwas3 per pound. However, John refuses to deliver the contracted wheat because the market price then was 5 per pound. If true, the flour mill can recover _______ in damages from John.Multiple choice question.1600160040040004000800

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Solution

The flour mill can recover $1600 in damages from John. Here's the step-by-step calculation:

  1. First, calculate the total cost of wheat that John agreed to sell to the flour mill. This is done by multiplying the quantity of wheat (800 pounds) by the agreed price per pound (3).So,800pounds3). So, 800 pounds * 3/pound = $2400.

  2. Then, calculate the total cost of wheat at the market price on the day John refused to deliver. This is done by multiplying the quantity of wheat (800 pounds) by the market price per pound (5).So,800pounds5). So, 800 pounds * 5/pound = $4000.

  3. Finally, calculate the damages the flour mill can recover from John. This is done by subtracting the total cost of wheat that John agreed to sell from the total cost of wheat at the market price. So, 40004000 - 2400 = $1600.

This problem has been solved

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