What is an implicit requirement of an output contract from a seller’s perspective?

An output contract inherently involves the seller's commitment to fulfill the buyer's needs by producing goods to meet the demand specified in the contract. From the seller's perspective, this means they are obligated to produce a quantity of goods that aligns with what the buyer requires, ensuring consistent supply and preventing interruptions in fulfilling the buyer's expectations. This requirement aims to maintain a steady production level and reinforces the trust in the business relationship between the seller and buyer.

In this context, the other options do not align with the essence of an output contract. Ensuring the highest pricing at delivery is a consideration in many sales agreements, but it is not an implicit requirement of an output contract. Offering discounts to incentivize buyer loyalty can be a business strategy but does not address the fundamental obligation connected with output contracts. Finally, the ability to discontinue production at any time contradicts the core purpose of an output contract, as it would undermine the commitment to meet demand. Thus, the focus on producing goods consistently to meet buyer demand is the foundational element of an output contract.