Demanded for the corn was less than the quantity supplied

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In 2012, the price of corn was $8 a bushel. In 2014, a huge harvest caused the price to drop to about $4 a bushel because quantity demanded for the corn was less than the quantity supplied. What is the law of supply and how does it explain why farmers increased their production of corn? If quantity demanded for corn is much less than quantity supplied, is that a shortage or a surplus? Would the price of corn be above the equilibrium price or below? Why is the price dropping?

Reference no: EM131172561

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