Corn, Soybeans, and Biofuels It is assumed that the demand for corn is increasing. The key determinant of demand involved is number of buyers, since corn has found a lucrative new market as raw material for the production of alcohol to be used in biofuels (Irwin & Good, 2009, p. 9). In and of itself, this should cause the price of corn to rise, since price rises with demand. Cross elasticity of demand should further cause the demand for corn's substitutes, such as soybeans, to rise, with a corresponding rise in their price (Chapter 3, n.d ., p. 79). We also assume that the corn and soybeans in question are being planted on the same fixed area of land, partly corn and partly soybeans. Thus, every field planted in corn is one that cannot...The end:
.....e charged for corn oil. References Chapter 3: Supply, demand, and elasticity. ( n.d .) Textbook sample chapter. Horizon Textbook Publishing. Retrieved from http://www.htpublishing.com/files/BV12Chapter03.pdf Fortenbery , T. R. & Park, H. (2008). The effect of ethanol production on the U.S. national corn price. Department of Agricultural & Applied Economics, University of Wisconsin-Madison. Staff Paper No. 523. Retrieved from http://www.aae.wisc.edu/renk/library/Effect%20of%20Ethanol%20on%20Corn%20Price.pdf Irwin, S. H. & Good, D. (2009). Market instability in a new era of corn, soybean, and wheat prices. Choices: The Magazine of Food, Farm & Resource Issues, 24(1), 6-11. Retrieved from EBSCO Academic Search Premier database.