Explain the effect of a fall in the oil price on the market for ethanol. If the
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Explain the effect of a fall in the oil price on the market for ethanol. If the price of oil remains low for some years, what will be the long-run effects on the market for ethanol and the number of ethanol producers?
Big drops in prices for crops make it tough down on the farm Corn, soybean, and wheat prices have fallen roughly 50 percent from the historic highs of earlier this year. With better-than-expected crop yields, world grain production will rise nearly 5 percent this year. Grain prices have also become more closely tied to oil prices because of the growing corn-based ethanol industry.
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The price of oil can significantly impact the market for ethanol which serves as an alternative sour...View the full answer
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