A consumer of natural gas buys a call struck at $2.50 per MMBTU for $.2/MMBTU. The call expires in October. Suppose the price of natural gas in October is:

a). $2.25;

b). $3;

c). $3.75.

For each case, explain whether the consumer should exercise this call or not. Calculate the consumers profit (or loss) from the above long position for each case.