Question
This question is about the pork market. Due to the government's program for developing alternative fuels, the demand for ethanol has increased dramatically. Ethanol is
This question is about the pork market. Due to the government's program for developing alternative fuels, the demand for ethanol has increased dramatically. Ethanol is made from corn. Corn is also used as a feed for hogs. Simultaneously, many more cases of mad cow disease have been discovered in the United States. Assume that pork and beef are substitutes in consumption, but not in production. As a result of these two changes, what will happen to the price and output of pork? Briefly explain. (Note: pork comes from hogs, and beef comes from cows.) In addition, show this graphically by choosing the appropriate graph from the four graphs (A - D) in the link below.
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