An ethanol producer purchases 10 futures contract of corn for delivery in December for a price of $4/bushel.What is the total gain or total loss to the ethanol producer if the price then increases to $5/bushel?

A. Total gain of $250,000.
B. Total loss of $50,000.
C. Total gain of $50,000.
D. Total loss of $200,000.

Answer: C. Total gain of $50,000.

Economics

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