Consider the market for corn.What happens if there is an increased demand for corn tortillas and,at the same time,a new corn seed becomes available that dramatically increases the yield per acre?
A)Price and quantity decrease.
B)The change in price is indeterminate;quantity decreases.
C)The change in price is indeterminate;quantity increases.
D)Price increases;the change in quantity is indeterminate.

Question

Quizplus · Accepted Answer

The increased demand for corn tortillas will result in an increase in the quantity demanded of corn, leading to an increase in both price and quantity. However, the introduction of a new corn seed that dramatically increases the yield per acre will increase the supply of corn, leading to a decrease in price and an increase in quantity. The net effect of these two factors is indeterminate for price, but quantity will definitely increase. Therefore, the best choice is C.

Consider the Market for Corn