Multiple choice

A steel company may buy all of the production of a nearby coal mining company.

  1. Output Contract

  2. Illusory Promise

  3. Requirement Contract

  4. Termination Clause
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A Correct answer
Explanation

An output contract is an agreement where a buyer agrees to purchase all of a seller's production or output of a certain good. In this scenario, the steel company is buying the entire production (output) of the coal mining company. A requirements contract would instead involve a seller agreeing to supply all of a buyer's needs.

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