If ethanol production is expected to increase the price of corn,U.S.farmers will likely
A) shift the supply of corn to the left.
B) shift the supply of corn to the right.
C) reduce the production of corn by sliding down the corn supply curve, all else equal.
D) increase the production of corn by sliding up the corn supply curve, all else equal.

Question

Quizplus · Accepted Answer

If ethanol production increases the price of corn, it creates a higher demand for corn, shifting the demand curve to the right. As a result, farmers will increase the production of corn by sliding up the corn supply curve to take advantage of the higher prices. Therefore, the correct answer is D - increase the production of corn by sliding up the corn supply curve, all else equal.

If Ethanol Production Is Expected to Increase the Price of Corn,U.S.farmers