Sugarcane can be used to produce both granulated sugar and ethanol.Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline.An economist would expect sugarcane prices to ____, and quantity sold to ____.
A)rise; rise.
B)fall; fall.
C)rise; fall.
D)fall; remain the same.

Question

Quizplus · Accepted Answer

The increase in ethanol content allowed in gasoline would likely increase the demand for ethanol, which is produced from sugarcane. This would lead to an increase in both the price and quantity sold of sugarcane, as suppliers respond to higher demand.

Sugarcane Can Be Used to Produce Both Granulated Sugar and Ethanol.Recent