This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: // Please use this as a reference and compile your own answer with its help // Best regards // // Honest Abe // 1] If the demand for corn increases due to its use as an alternative energy source, what will happen to the supply of corn's substitute such as soybean? Explain, in economic terms, why this is so. Supply of corn’s substitute like soybean will decrease if the demand for corn increases as an alternative source of energy. This will be due to the fact that increase in demand of corn will cause its prices to rise. So farmers producing corn substitutes like soybean will start producing corn instead, on their land. They will make more profit from corn’s high prices. Thus soybean will be produced lesser and its supply will fall.  What will happen to the price of corn oil? Corn oil price will rise due to above because more corn will be used for production of...
View Full Document
This note was uploaded on 09/20/2010 for the course ANM 8739 taught by Professor Morgan during the Spring '10 term at Alabama A&M University.
- Spring '10