The manager of View Your World, a high-end window manufacturer, notices that the cost to distribute their windows in the spot market has fallen. As a result of the change, which of the following is true?

A) The manager has more of an incentive to integrate backward.
B) The manager has less of an incentive to integrate backward.
C) The manager has more of an incentive to integrate forward.
D) The manager has less of an incentive to integrate forward.

D) The manager has less of an incentive to integrate forward.

Economics

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Which statement best describes who benefits from basis strengthening over a hedge with a futures contract?

A. Buyers gain, sellers lose B. Buyers lose, sellers gain C. Both gain D. Neither gains or loses since they have offset their basis risk by hedging

Economics

The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. The efficient quantity of transportation services is ________ and the corresponding price is ________

A) 120; $14 B) 120; $8 C) 80; $12 D) 80; $6

Economics