Decides to heavily subsidize ethanol production

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Ethanol is a motor fuel manufactured from corn, barley or wheat. Suppose the federal government decides to heavily subsidize ethanol production. Explain the effect of the subsidy on:

A. Corn.

B. Gasoline.

C. Automobiles.

D. Soybeans.

Oil prices have fallen recently due to falling global demand and rising global supply. What are some potential ways to combat rising fuel prices in the future (demand side and supply side)?

Reference no: EM131424735

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