The market for corn is initially in equilibrium

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The market for corn is initially in equilibrium. Suppose the production of? biofuels, which use corn as an? input, increases?, and at the same? time, increases in the price of oil cause farm production costs to rise. Which of the following explains the effect on equilibrium price and quantity in the corn? market?

A. The price and quantity of corn will riserise.

B. The price and quantity of corn will fall.

C. The price of corn will rise?, but the effect on equilibrium quantity cannot be determined without more information.

D. The quantity of corn will rise?, but the effect on equilibrium price cannot be determined without more information.

E. The quantity of corn will fall?, but the effect on equilibrium price cannot be determined without more information.

Reference no: EM131246990

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