Assume that the supply curve for corn is upward-sloping.In the market for corn,a primary input in the production of ethanol,total surplus _____ when the price of ethanol increases.
A)increases
B)decreases
C)does not change
D)The answer cannot be determined without information about the supply curve.

Question

Quizplus · Accepted Answer

When the price of ethanol increases, the demand for corn (a primary input in the production of ethanol) increases. This leads to an increase in the price and quantity of corn, moving up along the upward-sloping supply curve, which increases total surplus in the market for corn.

Assume That the Supply Curve for Corn Is Upward-Sloping