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Briefly explain how options can be used for hedging.
Equilibrium Quantity
The quantity of goods or services supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded.
Equilibrium Price
The price at which the quantity of goods supplied equals the quantity of goods demanded.
Constant Cost Industry
An industry in which the costs of production, including the prices of inputs, do not change as the total output of the industry changes.
Total Cost
The complete cost of production, including both fixed and variable costs.
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