Q37:
Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.
Which of the following, if true, most helps to justify the observers’ expectation?
A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it.
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.
D. As meat prices rise, the number of livestock producers is likely to rise again.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.
Answer: b
