Respuesta :
Suppose corn and wheat are substitutes in production. An increase in the supply of corn, everything else held constant, will cause the equilibrium price of wheat to decrease and the equilibrium quantity of wheat transacted to decrease.
Corn's market price lowers as the supply of the commodity rises. Because of this, businesses require more of it as a product input. Due to the substitution of corn and wheat, businesses also demand less wheat. It results in a decline and leftward shift in the demand curve for wheat. As a result, at the new market equilibrium, wheat's price and output declined. Therefore, choice C is the appropriate response.
Alternative A is erroneous since less demand results in lower prices for wheat. Alternative B is erroneous because, rather than increasing, wheat prices or production does so when demand declines. Alternative D is erroneous since output does not rise when demand falls.
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