Table 4-2 -Refer to Table 4-2

question 162

Multiple Choice

Table 4-2
$\begin{array}{|c|c|c|}\hline \text { Price }(\$) & \text { Quantity demanded } & \text { Quantity supplied } \\\hline 25 & 1 & 25 \\\hline 20 & 2 & 20 \\\hline 15 & 3 & 15 \\\hline 10 & 4 & 10 \\\hline 5 & 5 & 5 \\\hline\end{array}$
-Refer to Table 4-2.In the table shown, if the price were $10:

• A)a surplus of 6 units would exist and price would tend to fall
• B)a surplus of 3 units would exist and price would tend to rise
• C)a shortage of 3 units would exist and price would tend to fall
• D)a shortage of 6 units would exist and price would tend to rise

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Definitions:

Call Option

A call option is a financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Predetermined Price

A price level set in advance for transactions that will occur under specified conditions.

Specified Period

A particular duration or timeframe set out in a financial agreement or investment term.

Strike Price

The fixed price at which the owner of an option can purchase (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.