Assume that corn is an input in the production of beef but not in the production of pork.Further,beef and pork are substitutes in consumption.A decrease in the price of corn will _____ the supply of beef and _____ the demand for pork.
A)increase;increase
B)decrease;increase
C)decrease;decrease
D)increase;decrease

Question

Quizplus · Accepted Answer

A decrease in the price of corn, which is an input for beef production, will lower the costs of producing beef, leading to an increase in the supply of beef. As beef and pork are substitutes, an increase in the supply (and likely a decrease in the price) of beef will decrease the demand for pork, as consumers switch to the now cheaper beef.

Assume That Corn Is an Input in the Production of Beef