(Figure: Market for Peanuts II) at a Price Floor of $750

question 91

Multiple Choice

(Figure: Market for Peanuts II) At a price floor of $750, there is an excess supply of _____ tons of peanuts.

• A) 18 million
• B) 12 million
• C) 15 million
• D) 37 million

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Definitions:

Warrant

A security that gives the holder the right to purchase shares of stock at a fixed price over a given period of time.

Option Agreement

A contract that grants the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

Warrant

A financial instrument that gives the holder the right, but not the obligation, to buy shares of a company at a specific price before a certain date.

Arbitrage Opportunity

A situation where it's possible to simultaneously purchase and sell an asset or security and profit from the price difference.