The demand for corn increases. As a result, the price of corn will _______ and, the less elastic the supply of corn, the _______ will be the effect on the price.
A) rise; greater
B) fall; greater
C) fall; smaller
D) rise; smaller

Question

Quizplus · Accepted Answer

When demand for a product increases and supply remains relatively inelastic (not easily increased), the price of the product tends to rise. Inelastic supply means producers cannot quickly increase production, so the increased demand leads to higher prices.

The Demand for Corn Increases