Question

Safety Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic, Inc., in Connecticut, “F.O.B. New York.” Safety arranges with US Truckline to transport the goods. If the goods are destroyed in transit from New York to Connecticut, the loss will be suffered by

	a.	the seller.
	b.	businesses by an increase in the prices of safety gear.
	c.	the buyer.
	d.	the carrier.

Answer 1

Answer : The answer is option c.

Due to destroy of safety gear the market supply of safety gear will decrease which will shift the market supply curve of safety gear to leftward. As a result, the price will rise and quantity will decrease. So, due to destroy of safety gear the buyer will suffer the loss. Because after destroy of safety gear the buyer will pay more due to increase in price level. Therefore, option c is correct.