If the Producer of a Product Has Entered into a Fixed

question 50

Multiple Choice

If the producer of a product has entered into a fixed price sale agreement for that output, the producer faces:

• A)a nice steady profit because the output price is fixed.
• B)an uncertain profit if the input prices are volatile.This risk can be reduced by a short hedge.
• C)an uncertain profit if the input prices are volatile.This risk can be reduced by a long hedge.
• D)a modest profit if the input prices are stable.This risk can be reduced by a long hedge.
• E)a modest profit if the input prices are stable.This risk can be reduced by a short hedge.

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Definitions:

Axon

A neuron, or nerve cell, features a long, slender outgrowth which is primarily involved in sending electrical messages away from the neuron's main body.

Action Potential

A temporary reversal of electrical polarization of the membrane of a nerve cell or muscle cell, allowing for the transmission of signals.

Electrical Conduction

The movement of electrically charged particles through a transmission medium.

Sodium Ions

Positively charged particles of sodium, essential in the body for maintaining cellular function, nerve impulses, and fluid balance.