The Figure Below,which Shows a Linear Demand Curve and the Associated

question 16

Multiple Choice

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question. The marginal revenue of the 100^th unit is $_____.

• A)0
• B)20
• C)40
• D)50
• E)cannot tell from the information provided

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Definitions:

Exercise Price

The amount for which someone holding an option is allowed to buy (for call options) or sell (for put options) the base asset.

Hedge Ratio

A ratio used to determine the amount of derivatives needed to hedge a particular exposure, indicating the relationship between the position size in hedging instruments and the size of the exposure.

American Put Options

Contracts that give the holder the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time period.

European Puts

Options contracts giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a predetermined price within a specified time frame.