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An increase in the popularity of corn ethanol as a fuel increases the demand for corn around the world, causing the price to rise. What
An increase in the popularity of corn ethanol as a fuel increases the demand for corn around the world, causing the price to rise.
What is the reason behind the higher price?
A To meet higher demand, the industry relies more on less cost efficient producers of corn.
B Higher fixed costs incurred in order to meet demand end up increasing the cost of production.
C Corn ethanol's relative inefficiency as a fuel raises production costs for corn producers.
D The opportunity cost for supplying corn is higher than before.
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