Futures Contracts Are Sold on Exchanges and Are Consequently ____

question 67

Multiple Choice

Futures contracts are sold on exchanges and are consequently ____ than forward contracts, which can be ____ to satisfy an MNC's needs.

• A) more standardized; standardized
• B) more standardized; custom-tailored
• C) more custom-tailored; standardized
• D) more custom-tailored; custom-tailored
• E) less standardized; custom-tailored

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Definitions:

Perfectly Inelastic

A situation in which the quantity demanded or supplied of a good does not change in response to a change in price.

Elastic

Elastic refers to a situation where the demand for a product or service significantly changes in response to price changes.

Inelastic

Describes a situation where the quantity demanded or supplied of a good or service is relatively unresponsive to changes in its price.

Profit-Maximizing Quantity

The level of output at which a business achieves the highest possible profit, balancing incremental costs and revenues.