Answer to Question #37089 in Microeconomics for tom

Question #37089
why rising grain prices has lead to the increase in the price of tortillas in mexico
1
Expert's answer
2013-11-22T13:21:22-0500
Spurred by the increasing use of corn for ethanol, tortilla prices in Mexico have skyrocketed by more that 50 percent in many regions. Mexicans protested these sharp increases, forcing the government of Felipe Calderon to publicly promise to punish speculators and to call for increased corn imports. Calderon also negotiated a pact with the largest tortilla producers to cap the price of tortillas at 8.5 pesos per kilogram-a 40 percent price increase. However few consumers will benefit from these efforts. Instead, WALMART, the large corporations that dominate the industry, and the U.S. transnational companies that supply Mexico with corn are likely to be the beneficiaries.
As grain is the main component in producing tortillas, the increase in grain prices will cause the increase in tortilla prices, as the cost of producing tortillas increased.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS