There are four essential laws of supply and demand, assuming that all other factors remain equal, which of the following statements is true?

• A. If demand decreases and the supply doesn't change, then the price will increase.
• B. If demand increases and supply doesn't change, then the price will decrease.
• C. If supply decreases and demand doesn't change, then the price will increase.
• D. If supply increases and demand doesn't change, then the price will increase.

Revenue from rendering services is recognized when __________.

• A. services are completed and billed
• B. the contract is signed
• C. a prime contractor pays a subcontractor
• D. a contract specifies revenue should be recognized

A written demand by one of the contracting parties seeking the payment of money in a sum certain is a/an
__________.

• A. invoice
• B. claim
• C. request for equitable adjustment
• D. arbitration

A benefit of performance-based acquisition is __________.

• A. a focus on process rather than results
• B. the seller has the ability to require specific solutions
• C. shared incentives permitting innovation
• D. detailed specifications leading to fewer protests

Scenario 4.0:
The buyer intended to change the pricing structure for a contract for garbage collection services at one of its facilities. Previously, the contract included contract line items priced on a "per-ton" basis, along with overhead line items covering the contractor's variable costs. The buyer intended to issue a solicitation that eliminated the overhead line items, thus requiring all costs to be included in a "price-per-ton" pricing method.
Prior to issuing a solicitation, the buyer conducted market research to determine whether it was customary industry practice to price garbage collection services based on the weight of the garbage collected. This market research included three parts:
* Reviewing refuse contracts at three other locations;
* Posting a notice to potential sellers asking for feedback on the proposed structure, to which the buyer received seven responses-four of which suggested a monthly line-item structure, which would include variable costs and not be on a "per-ton" basis, since these four respondents indicated that a "per-ton" pricing structure was not a "customary commercial practice," and three had no comment about the line-item structure; and
* Obtaining "historical market research" that had been performed during the previous year by personnel at another buyer location, consisting of talking to a sales representative from a waste removal company who indicated that his company used a "per-ton" pricing structure that was a "practical method of pricing for trash removal services." Following this market research, the buyer determined that it was "in the buyer's best interest" to utilize the
"per-ton" approach and that it was a "customary commercial practice."
A solicitation was issued requiring offerors to submit fixed prices on a per-ton basis for several line items, for which the solicitation provided estimated quantities. The buyer removed the line items for overhead costs that had been present in the prior contract for waste removal. Instead, the new solicitation required offerors to submit prices that reflected "all fixed and variable costs" on a per-ton basis and only permitted the seller "to invoice on tonnage collected." The resulting statement of work indicated that the seller was required to provide all items necessary to perform the required services, including personnel, equipment, supplies, facilities, materials, and supervision.
Question:
The new contract structure, in which all costs were to be included in the "per-ton" price, shifted more risk to which party?

• A. The buyer, because the tonnage of waste collected could vary, making it difficult to predict the costs.
• B. The seller, because the tonnage of waste collected may not be sufficient to cover variable costs that are not dependent upon the weight of waste collected.
• C. The buyer, because the seller could inflate its costs in the fixed "per-ton" price.
• D. The seller, because its variable costs can be tied directly to the tonnage of waste collected.