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.

Question

Quizplus · Accepted Answer

As corncobs are a waste product of ethanol production, an increase in ethanol production will lead to an increase in the supply of corncobs, which will likely cause prices to fall and sales to increase in the corncob pipes market.

If an Increase in Oil Prices Made It Profitable to Use