Consider the market for corn.What happens if there is an increased demand for corn tortillas and,at the same time,a new corn seed becomes available that dramatically increases the yield per hectare?
A) Price and quantity decrease.
B) The change in price is indeterminate;quantity decreases.
C) The change in price is indeterminate;quantity increases.
D) Price increases;the change in quantity is indeterminate.

Question

Quizplus · Accepted Answer

An increase in demand for corn tortillas will cause an increase in the price and quantity demanded of corn. However, the availability of a corn seed that increases yield per hectare will also increase the supply of corn, causing the price to decrease and the quantity to increase. The net effect on price and quantity is indeterminate, but quantity is likely to increase.

Consider the Market for Corn