Answer to Question #24280 in Economics of Enterprise for mohamed

Question #24280

Question 4
a. Ethanol is again viewed as one part of a solution to the problem of shortages of
petroleum products. Ethanol is made from a blend of gasoline and alcohol
derived from corn or sugar cane. What would you expect the impact of this
program to be on the price of corn, soybeans and wheat? Discuss.
[6 marks]
b. Why invest capita in purely competitive industries with equilibrium margins that
are razor thin and entrants that erode quasi profits? Suppose volume is not
exceptionally large, why then?

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