Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Supply of soybeans decreases and price increases
B
Supply of soybeans increases and price decreases
C
Supply of soybeans remains unchanged and price decreases
D
Supply of soybeans decreases and price remains unchanged
Understanding the Answer
Let's break down why this is correct
Answer
If the price of corn goes up a lot, farmers might decide to plant more corn instead of soybeans because they want to make more money. This means that the supply of soybeans could decrease since fewer farmers are growing them. When the supply of something goes down, the price usually goes up because there are fewer products available for people to buy. For example, if a farmer can earn more by growing corn than soybeans, they might switch their fields to corn, leading to less soybean production. As a result, we would likely see soybean prices rise due to the lower supply.
Detailed Explanation
When corn prices go up, farmers may choose to grow more corn instead of soybeans. Other options are incorrect because Some might think that higher corn prices mean more soybeans will be grown; It's a common mistake to think that prices can stay the same when supply changes.
Key Concepts
Production Possibilities
Substitutes in Production
Market Behavior
Topic
Production Possibilities and Price Effects
Difficulty
easy level question
Cognitive Level
understand
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