Use supply and demand analysis to explain what is most likely to happen to the price and quantity of corn when there is an increase in the demand for ethanol, which is produced using corn. What other effects would such a change in the corn market have
on the price of beef, the price of farmland, and the price of corn syrup?
Please provide the best answer for the statement.
In such a market for corn, the supply curve does not change, but the demand curve increases because corn is used to produce ethanol. The rightward shift in the demand curve increases the price of corn and increases the quantity demanded and the quantity supplied for corn. The increase in the price of corn is likely to increase the price of corn-fed beef, increase the price of farmland used to grow corn, and increase the price of corn syrup using to make soft drink and other products.
You might also like to view...
A shortage occurs when the market price is lower than the equilibrium price
Indicate whether the statement is true or false
Exhibit 16-5 Money, investment and product markets
In Exhibit 16-5, a shift in aggregate demand from AD2 to AD3:
A. increases real GDP, and lowers the price level. B. decreases real GDP, and lowers the price level. C. increases real GDP, and raises the price level. D. decreases real GDP, and raises the price level.
After one year, a company will pay $20 in dividends. It commits to paying $21 two years from the current date. This growth rate in dividends is expected to continue indefinitely. The interest rate is 8%. Compute the current price of this stock, using the dividend-discount model.
What will be an ideal response?
If an auto manufacturer installs antilock brakes on a vehicle, and that alone causes the price to increase by $100, the BLS
A. does not count that increase as part of the inflation rate. B. counts only half of the price increase as part of the inflation rate. C. subtracts that price increase from the overall inflation rate. D. counts that increase as part of the inflation rate.