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# Escalating worldwide demand for corn has led to a sharp

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Intern
Joined: 14 Aug 2005
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Escalating worldwide demand for corn has led to a sharp [#permalink]

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29 Aug 2005, 00:42
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Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.

Which of the following, if true, most helps to justify the observersâ€™ expectation?
A. The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it.
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.
D. As meat prices rise, the number of livestock producers is likely to rise again.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.

what is the answer going to be? B or E
you might be able to see this question in the CAT.
Please looking into the boldic face, try to come out with the answer.
CR is tough.
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aa

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29 Aug 2005, 01:25
dmz - why have you bolded that phrase?

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29 Aug 2005, 02:46
Just because that phrase might be a clue to picking up the answer.
Sorry to make you confused, if I did.
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29 Aug 2005, 03:01
I guess, the answer is B 'coz the author is trying to hint us that price fall is going to be a short-term and an immediate one. hence, going by B, since the farmers send their stock early to the marktes, there will be a increase in the amount of meat available and hence, the price might reduce.

OA/OE Plz
Krishna

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29 Aug 2005, 04:32
Yeah Ill go with B too since it is linking farmers going out of business to low meat prices.

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29 Aug 2005, 07:59
B for me too.
Observer's expectation is a short-term decrease in meat-prices and B just explains a probable reason for it.

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29 Aug 2005, 07:59
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# Escalating worldwide demand for corn has led to a sharp

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