The demand for corn has increased over the past few decades to satisfy the increasing demand from the food and ethanol industries.The primary beneficiaries of an expansion in the output of corn are owners of farmland suitable for corn production.What can you conclude about the nature of the corn industry?
A)The corn industry is not competitive.
B)The corn industry is an increasing-cost industry.
C)The long-run corn supply curve is horizontal.
D)There are barriers to entry in the corn industry.

Question

Quizplus · Accepted Answer

The primary beneficiaries being owners of suitable farmland suggests that as demand increases, the costs of production also increase, indicating an increasing-cost industry. This is because as demand for corn grows, more resources are needed for its production, which can drive up the cost of inputs such as land, leading to higher overall production costs.

The Demand for Corn Has Increased Over the Past Few