Suppose that price and quantity are positively correlated as in this table:                 There is a 50% chance of either price. The futures price is $2.50. Demonstrate the effect of hedging if we...

Suppose that price and quantity are positively correlated as in this table:

There is a 50% chance of either price. The futures price is $2.50. Demonstrate the effect of hedging if we do the following:

a. Short the expected quantity.

b. Short the minimum quantity.

c. Short the maximum quantity.

d. What is the hedge position that eliminates variability in revenue? Why?