Refer to the Diagram Illustrating the Market for Corn

question 134

Multiple Choice

Refer to the diagram illustrating the market for corn.If the price in this market were to be fixed at $4 per bushel,the part of the line marked A would represent a:

• A) surplus of 8,000 bushels.
• B) shortage of 8,000 bushels.
• C) surplus of 7,000 bushels.
• D) shortage of 7,000 bushels.

---

Definitions:

Short 300 Shares

A trading strategy where an investor borrows 300 shares from a broker and sells them on the open market, planning to buy them back later at a lower price.

Initial Margin

The minimum amount of equity required to open a new position in a margin account, set by the broker.

Common Stock

A type of security that represents ownership in a corporation, giving shareholders voting rights and potential dividends.

Bid-Ask Spread

The difference between the highest price that a buyer is willing to pay (bid) for an asset and the lowest price that a seller is willing to accept (ask).