Flexibility options allow a firm to potentially switch between various products and or services. Suppose you are considering how to heat a large commercial building. How might you decide to heat the building if you foresee extreme variability in the price of various types of energy $($gas$,$ electric, wind, coal, oil$)?$

You would choose wind power, because though it costs more and is expected to continue to cost more than the other fuel sources, you value it because the price is always the same.

You would choose whatever fuel source $($gas$,$ electric, wind, coal, oil$)$ provides the least cost, based solely on current prices.

You would consider the possibility of price changes and your ability to react to those price changes. You may engage in a heating source that has the flexibility to switch to various sources of fuel, based on the current market prices of these fuel sources.

You would choose to diversify and heat with all the various sources of fuel and, therefore, have an average price that is less than the highest fuel source, but more than the lowest fuel source.