Parrot Co. operates an online store where it sells the products of Biscuit Co. Under the contract between Parrot and Biscuit, Parrot buys the product of Biscuit after Parrot receives an order from an online shopper. Biscuit undertakes to deliver the goods directly to the customer. The customer pays through the website of Parrot at a marked-up price. Parrot then remits the payment to Biscuit at the contracted price, which is lower. Parrot does not keep any inventory of Biscuit products. The arrangement between Parrot and Biscuit implies a principal agent relationship whereby Parrot is an agent of Biscuit. IS IT TRUE OR FALSE ?
Parrot Co. operates an online store where it sells the products of Biscuit Co. Under the contract between Parrot and Biscuit, Parrot buys the product of Biscuit after Parrot receives an order from an online shopper. Biscuit undertakes to deliver the goods directly to the customer. The customer pays through the website of Parrot at a marked-up price. Parrot then remits the payment to Biscuit at the contracted price, which is lower. Parrot does not keep any inventory of Biscuit products. The arrangement between Parrot and Biscuit implies a principal agent relationship whereby Parrot is an agent of Biscuit. IS IT TRUE OR FALSE ?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Parrot Co. operates an online store where it sells the products of Biscuit Co. Under the contract between Parrot and Biscuit, Parrot buys the product of Biscuit after Parrot receives an order from an online shopper. Biscuit undertakes to deliver the goods directly to the customer. The customer pays through the website of Parrot at a marked-up price. Parrot then remits the payment to Biscuit at the contracted price, which is lower. Parrot does not keep any inventory of Biscuit products. The arrangement between Parrot and Biscuit implies a principal agent relationship whereby Parrot is an agent of Biscuit.
IS IT TRUE OR FALSE ?
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