Suppose that the price of fertilizer,an input in the production of corn,falls.We would predict that the equilibrium quantity of corn will ________ and the equilibrium price of corn will ________.

Question

Quizplus · Accepted Answer

When the price of fertilizer, which is an input in the production of corn, falls, the cost of producing corn decreases. This typically leads to an increase in the supply of corn as producers can afford to produce more. As a result, the equilibrium quantity of corn in the market will rise due to the increased supply. However, the increase in supply also means that there is more corn available in the market than before, which tends to push the price down. Therefore, the equilibrium price of corn will fall.

Suppose That the Price of Fertilizer,an Input in the Production