If a Firm's Demand Is Subject to Random Fluctuations, the Firm's

question 36

Multiple Choice

If a firm's demand is subject to random fluctuations, the firm's ________ will also be random.

• A)average variable cost
• B)average total cost
• C)marginal cost
• D)marginal revenue

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Definitions:

Short-Selling

The practice of selling securities or other financial instruments that are not currently owned, with the intention of repurchasing them at a lower price.

Writing Options

The act of creating an options contract to sell to another party, involving the obligation to buy or sell the underlying asset if the option is exercised.

Risk Lover

An individual or investor who prefers to take more risk in their investments for the possibility of higher returns.

Risk-Neutral

An attitude or assumption in financial theory where an investor doesn't require higher returns for taking on more risk.