Suppose farmers in a given market can either grow soy beans or corn on their land. In addition, suppose an increase in the demand for corn causes the price of corn to increase. In the long run, this increase in the demand for corn is likely to ________ the price of soy beans.
A)lead to an increase in
B)lead to a decrease in
C)have no effect on
D)have an ambiguous effect on

Question

Quizplus · Accepted Answer

In the long run, as farmers switch out of soy beans and into corn, the market supply of soy beans will fall, leading to an increase in the price of soy beans.

Suppose Farmers in a Given Market Can Either Grow Soy