A Futures Trader Who Has a _______ Position in Oil

question 42

Multiple Choice

A futures trader who has a _______ position in oil futures wants the price of oil to _______ in the future.

• A) short; double
• B) short; fall
• C) short; stay the same
• D) short; rise

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Definitions:

Marginal Cost

Marginal cost refers to the variation in total production expenses when there is an increase of one unit in the quantity produced.

Marginal Revenue

The change in total revenue that results from the sale of 1 additional unit of a firm’s product; equal to the change in total revenue divided by the change in the quantity of the product sold.

Mutual Interdependence

A situation in economics where the actions and decisions of one firm directly influence, and are influenced by, the actions and decisions of other firms within the same market.

Oligopolistic Industries

Oligopolistic industries are characterized by a market structure in which a small number of firms have large control over market share, leading to limited competition and significant influence over prices and products.