Use the Following to Answer Questions

question 8

Multiple Choice

Use the following to answer questions
Table: The HP Stock Exchange

-(Table: The HP Stock Exchange) The HP Stock Exchange lets members of HP's sales team buy and sell shares that pay off when sales fall within a certain range. A typical security would pay out $1, if and only if future sales fell within the specific range of that share. Accordingly, the trading prices given in the table suggest that the probability of selling:

• A) less than 5,000 is 10%.
• B) more than 15,000 is 40%.
• C) between 10,000 and 15,000 units is at least 20%.
• D) between 15,000 and 25,000 units is 60%.

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Definitions:

Net Loss

The amount by which total expenses exceed total revenues in a specific period, indicating a negative financial performance.

X-Inefficiency

The difference between efficient behavior of businesses theoretically assumed or envisaged and their observed behavior in reality due to a lack of competitive pressure.

Competitive Firms

Businesses operating in a market where they must compete with others for the same customers, without having significant control over market prices.

Monopolistic Firms

Companies that have the majority of market share within their industry, allowing them to affect pricing and market conditions.