Land used to grow corn can also grow soybeans. As the demand for corn used in ethanol began to increase the price of corn, what happened to the price of soybeans?
A) The price of soybeans fell due to lower demand for soybeans.
B) The price of soybeans rose since farmers began planting corn instead of soybeans, thus decreasing the supply of soybeans.
C) The price of soybeans rose since they were in limited supply and demand increased.
D) The price of soybeans stayed the same, since subsidies made up for any differences in the price between corn and soybeans.

Question

Quizplus · Accepted Answer

With the increase in demand for corn, farmers started planting more corn and less soybean. This decreased the supply of soybeans, leading to an increase in its price. Therefore, the price of soybeans rose since farmers began planting corn instead of soybeans, thus decreasing the supply of soybeans.

Land Used to Grow Corn Can Also Grow Soybeans