Both ethanol and sugar are made from sugar cane and ethanol can be used as a substitute for oil. As the price of oil increases, Brazilians shift sugar cane from sugar production to ethanol production, thereby:
A) increasing the price of ethanol.
B) increasing the price of sugar.
C) increasing the price of both ethanol and sugar.
D) decreasing the price of both ethanol and sugar.

Question

Quizplus · Accepted Answer

As sugar cane is diverted from sugar production to ethanol production, the supply of sugar decreases, leading to an increase in the price of sugar.

Both Ethanol and Sugar Are Made from Sugar Cane and Ethanol