The Only Thing That the Grantee of an Option May

question 59

True/False

The only thing that the grantee of an option may do with the option is to exercise it or let it expire.

---

Definitions:

P > MC

Indicates a situation where the price (P) of a good is greater than the marginal cost (MC) of producing it, suggesting the potential for economic profits.

Short Run

A time period in economics during which at least one factor of production is fixed, limiting the ability of the business to adjust to market changes fully.

Monopolistically Competitive Firm

A type of firm in a market structure where many companies sell products that are similar but not identical, and each has some control over its price.

Monopolistic Competition

A market structure characterized by the presence of several firms that sell similar, but slightly differentiated, products and services where each has some control over its prices.