Question

4. The effect of prices between two markets Aa Aa The article, which was published in January, states that "The price rise comes at an important time of the year for farmers who are deciding what seeds to plant in spring. Based on current prices, the amount of land used for corn growing will increase this year at the expense of soyabeans and wheat." The diagram below shows the market for wheat. Drag one or both of the curves to show the effect of an increase in the price of corn on the market for wheat. PRICE OF WHEAT Dollars per bushell Supply Demand QUANTITY OF WHEAT Millions of bushels]

Answer 1

Its answer is A.

If the price of corn increases,farmers will increase their production of corn and decrease production of wheat .

So, supply curve of wheat shifts to the left. Moreover, since corn and wheat are substitutes, an increase in the price of corn leads people to increase their demand for wheat and hence demand for wheat shifts to the right.An increase in demand for wheat and decrease in supply of wheat will likely lead to an increase in the price of wheat as shown in the diagram.

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