If an Increase in Oil Prices Made It Profitable to Use

question 85

Multiple Choice

If an increase in oil prices made it profitable to use corn-based ethanol for fuel and corncobs are a waste product of ethanol production, what will happen in the market for corncob pipes?

• A) Supply will increase, prices will fall, and sales will increase.
• B) Supply will decrease, prices will rise, and sales will decrease.
• C) Demand will increase, prices will rise, and sales will increase.
• D) Demand will decrease, prices will fall, and sales will decrease.

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Definitions:

Consolidated Income Statement

A financial report that combines the income, expenses, and net profit of a parent company and its subsidiaries, showing the total earnings of the entire corporation.

Non-Controlling Interests

A minority stake in a company, representing shareholders who do not have controlling interest or decision-making power in the enterprise.

Goodwill

Goodwill represents the excess of the purchase price paid for an acquired company over the fair value of its identifiable net assets at the time of acquisition.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee, recognizing their share of the profits and losses.