Expression 6: "h" left parenthesis, "x" , right parenthesis equals StartFraction, 1 Over 1 minus StartNestedFraction, left parenthesis, 1 minus "x" , right parenthesis NestedOver left parenthesis, 1 , right parenthesis , EndNestedFraction Superscript, 1 quarter , Baseline , EndFraction left brace, "x" greater than 0 , right bracehx=11−1−x114x>0
6
h(x) - move P_a down away from current price and keep P_b fixed
7
Expression 8: "f" prime left parenthesis, "x" , right parenthesisf′x
8
Expression 9: "f" prime prime left parenthesis, "x" , right parenthesis equals 0f′′x=0
9
For every 1% increase beyond +/- 84% from the current price one gains less capital efficiency.