Question

Which type of real option allows a project to be expanded if demand turns out to be greater than expected?

Answer 1

Expansion option

Step-by-step explanation:

An expansion option is an option that permits the project to be expanded in the case when the demand comes to be more than as anticipated

Here the option for expanding provides the firm an opportunity to enlarge or rise its capacity in terms of output with respect to the market conditions i.e. favorable

hence, the expansion option is the answer