A Monopoly

question 112

Multiple Choice

A monopoly:

• A) can increase price and increase output at the same time.
• B) can charge any price it wants and still sell all of its output.
• C) can sell any output it produces provided it accepts the market price.
• D) must lower price in order to increase output.
• E) faces a perfectly elastic demand curve.

Know the expiration and exercise mechanisms for American-style, European-style, and exotic options.

Understand margin requirements for options, their calculation, and implications for traders.

Differentiate between the trading of options on stocks versus futures contracts.

Comprehend the concept of conversion as related to convertible bonds and how options can be incorporated into other financial instruments.

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Definitions:

Customer Service Department

A division within a company dedicated to addressing customer inquiries, concerns, and providing support.

Unused Capacity

The portion of a company's production capability or resources that is not being utilized to its full potential.

Number of Employees

The total count of individuals working for a company, including full-time and part-time staff.

Time-Driven Activity-Based Costing

An accounting method that allocates costs based on actual activities performed and the time it takes to complete those activities.