"Higher Ethanol Production Definitely and Directly Raises the Price of Corn

question 154

Multiple Choice

"Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the short run in the corn market, what is TRUE if the production of ethanol increases?

• A) Individual corn farmers will incur an economic loss in the short run and will shut down.
• B) Individual corn farmers will make an economic profit in the short run.
• C) Individual corn farmers will incur an economic loss in the short run, but they will still produce.
• D) Individual corn farmers will make zero economic profit in the short run.

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