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"Higher Ethanol Production Definitely and Directly Raises the Price of Corn

Question 412

Multiple Choice

"Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the long run in the corn market, what is TRUE if the production of ethanol increases?


A) Existing corn farmers will exit the market and decrease the market price.
B) New corn farmers will enter the market and increase the market price.
C) Existing corn farmers will exit the market and increase the market price.
D) New corn farmers will enter the market and decrease the market price.

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