Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 23 May 2017, 02:59

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Escalating worldwide demand for corn has led to a sharp

Author Message
TAGS:

### Hide Tags

VP
Joined: 22 Nov 2007
Posts: 1082
Followers: 8

Kudos [?]: 565 [3] , given: 0

Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

27 Jan 2008, 03:03
3
KUDOS
8
This post was
BOOKMARKED
00:00

Difficulty:

35% (medium)

Question Stats:

68% (02:12) correct 32% (01:27) wrong based on 538 sessions

### HideShow timer Statistics

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 observers’ 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.
[Reveal] Spoiler: OA
If you have any questions
New!
CEO
Joined: 17 Nov 2007
Posts: 3586
Concentration: Entrepreneurship, Other
Schools: Chicago (Booth) - Class of 2011
GMAT 1: 750 Q50 V40
Followers: 572

Kudos [?]: 3966 [5] , given: 360

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

28 Jan 2008, 06:35
5
KUDOS
Expert's post
2
This post was
BOOKMARKED
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.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ 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. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.
_________________

HOT! GMAT TOOLKIT 2 (iOS) / GMAT TOOLKIT (Android) - The OFFICIAL GMAT CLUB PREP APP, a must-have app especially if you aim at 700+ | PrepGame

Intern
Joined: 04 Sep 2015
Posts: 20
Followers: 0

Kudos [?]: 21 [2] , given: 29

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

17 Oct 2015, 02:21
2
KUDOS
marcodonzelli wrote:
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 observers’ 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.

Another trap by the GMAT in which a lot of takers (including me) fall into.

Conclusion says "IMMEDIATE short-term decrease" ... so an answer choice could be true but it doesn't address the "IMMEDIATE" short-term decrease

This is the reason why D is wrong. Because when you say "again" you are talking about a long term kind of thing.

If you look at B, it address something IMMEDIATE.

Good job GMAC

_________________

I am the champ! Mayweather who?!

Manager
Status: Private GMAT Tutor
Joined: 22 Oct 2012
Posts: 74
Location: India
Concentration: Economics, Finance
Schools: IIMA (A)
GMAT 1: 780 Q51 V47
Followers: 42

Kudos [?]: 166 [2] , given: 35

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

13 Dec 2015, 22:15
2
KUDOS
minwoswoh wrote:
pinoygmat wrote:
marcodonzelli wrote:
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 observers’ 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.

Another trap by the GMAT in which a lot of takers (including me) fall into.

Conclusion says "IMMEDIATE short-term decrease" ... so an answer choice could be true but it doesn't address the "IMMEDIATE" short-term decrease

This is the reason why D is wrong. Because when you say "again" you are talking about a long term kind of thing.

If you look at B, it address something IMMEDIATE.

Good job GMAC

Hi,

Good observation. However, I think that this question does require some outside knowledge, since nowhere in the passage is it mentioned that more supply of meat would yield lower prices of meat... don´t you agree?

Since I am very limited on Economy, can I ask you if the following statements are mostly true:
- If Demand increases and Supply remains equal, then Price increases
- If Demand decreases and Supply remains equal, then Price decreases
- If Supply increases and Demand remains equal, then Price decreases
- If Supply decreases and Demand remains equal, then Price increases.

Thank you so much!

Hi,

GMAT is not formal logic and thus, require use of common sense knowledge (what is common sense? We don't know! But GMAT has its own criteria perhaps).

This post gives even more examples where GMAT requires common sense: as-a-construction-material-bamboo-is-as-strong-as-steel-and-135997.html#p1218565

Also, all of your observations about economics are correct. Price is directly related to demand and inversely related to supply.

Thanks,
Chiranjeev
_________________
Manager
Joined: 07 Jan 2008
Posts: 74
Followers: 1

Kudos [?]: 14 [1] , given: 0

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

28 Jan 2008, 14:48
1
KUDOS
We shoudl find a reason for the observers expectation that their would be a decrese in meat price.

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.(Corn is not observers are talking about)
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.(Could be. b'coz if the farmers send their livestock early to the market, their would be more supply which will cause the decrese in prices)
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.(Out of scope)
D. As meat prices rise, the number of livestock producers is likely to rise again.([color=#BF00800]Observer is talking about price decrese[/color])
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.(The farmers investment on the livestock will increase or decrese. V dont know if the feeder being used it expensive than corn or not)

So, will go for B

OA?
Jamboree GMAT Instructor
Status: GMAT Expert
Affiliations: Jamboree Education Pvt Ltd
Joined: 15 Jul 2015
Posts: 286
Location: India
Followers: 76

Kudos [?]: 274 [1] , given: 1

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

18 Dec 2015, 22:08
1
KUDOS
Expert's post
The fundamental concept in Economics is if demand is more and supply is less, the price rises and vice versa. "B" implies that if the livestock are sent early, supply is more and demand is not commensurate with that - hence the price falls.
_________________

Aryama Dutta Saikia
Jamboree Education Pvt. Ltd.

VP
Joined: 22 Nov 2007
Posts: 1082
Followers: 8

Kudos [?]: 565 [0], given: 0

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

28 Jan 2008, 11:51
1
This post was
BOOKMARKED
walker wrote:
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.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ 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. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.

now it is clear!
Manager
Joined: 01 Nov 2007
Posts: 144
Followers: 2

Kudos [?]: 362 [0], given: 0

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

28 Jan 2008, 12:38
I agree. B must be the answer.

marcodonzelli wrote:
walker wrote:
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.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ 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. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.

now it is clear!
Director
Joined: 30 Jun 2007
Posts: 790
Followers: 1

Kudos [?]: 164 [0], given: 0

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

28 Jan 2008, 23:09
Here is my take - hope this helps!

Conclusion: Observers expect an immediate short-term decrease in meat prices.
Argument: Corn is extensive feed for livestock and because profit margins are tight in the livestock business, many farmers leaving the Corn business.

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. [The argument is concerned about immediate decline in livestock price – nothing to do with corn prices decline – eliminate it]

B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. (Hold it)

C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.[Nothing discussed about dietary habits in the passage – eliminate it]

D. As meat prices rise, the number of livestock producers is likely to rise again.[Nothing addressing the short-term decline – eliminate it]

E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.[This is also no specified as part of the argument – eliminate it]

Intern
Joined: 31 May 2010
Posts: 37
Followers: 0

Kudos [?]: 2 [0], given: 2

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

29 Aug 2011, 19:47
WAs a close call btw B and D.

The word short term decrease made me choose B.
Manager
Joined: 15 Nov 2010
Posts: 105
Followers: 4

Kudos [?]: 3 [0], given: 15

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

07 Sep 2011, 17:56
marcodonzelli wrote:
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 observers’ 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.

B it is. The rest of answer choices does not explain why the meat prices might decrease.
Manager
Joined: 31 May 2012
Posts: 160
Followers: 6

Kudos [?]: 174 [0], given: 69

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

02 Jun 2014, 01:14
I am unable to understand this question. Can you please elaborate this demand-supply problem?
My Premises:
1. Corn Demand Increase
--leads to --> Corn Prise Increase
2. Farmers leave Corn Business, because a) Corn will be used as a livestock b) Margins are tight in livestock. (I am not clear in this )
--leads to --> Fewer suppliers of Corn?
Questions:
#2. As margins in livestock are tight. They leave livestock business and join Corn business. Is it correct ?
#3. If farmers join Corn business after leaving livestock business, Price of meat should increase.

Conclusion:
Immediate short-term decrease in meat prices.
#4. I tempted to chose E, but its wrong.
GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10367
Followers: 996

Kudos [?]: 223 [0], given: 0

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

02 Jun 2015, 09:36
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Manager
Joined: 10 May 2014
Posts: 141
Followers: 0

Kudos [?]: 83 [0], given: 28

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

13 Dec 2015, 17:41
pinoygmat wrote:
marcodonzelli wrote:
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 observers’ 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.

Another trap by the GMAT in which a lot of takers (including me) fall into.

Conclusion says "IMMEDIATE short-term decrease" ... so an answer choice could be true but it doesn't address the "IMMEDIATE" short-term decrease

This is the reason why D is wrong. Because when you say "again" you are talking about a long term kind of thing.

If you look at B, it address something IMMEDIATE.

Good job GMAC

Hi,

Good observation. However, I think that this question does require some outside knowledge, since nowhere in the passage is it mentioned that more supply of meat would yield lower prices of meat... don´t you agree?

Since I am very limited on Economy, can I ask you if the following statements are mostly true:
- If Demand increases and Supply remains equal, then Price increases
- If Demand decreases and Supply remains equal, then Price decreases
- If Supply increases and Demand remains equal, then Price decreases
- If Supply decreases and Demand remains equal, then Price increases.

Thank you so much!
_________________

Consider giving me Kudos if I helped, but don´t take them away if I didn´t!

What would you do if you weren´t afraid?

Manager
Joined: 10 May 2014
Posts: 141
Followers: 0

Kudos [?]: 83 [0], given: 28

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

14 Dec 2015, 13:33
Hi chiranjeev12,
Thanks for the taking the time to read my post and answer my (very basic!) questions about Economy.
+1 for you
_________________

Consider giving me Kudos if I helped, but don´t take them away if I didn´t!

What would you do if you weren´t afraid?

Manager
Joined: 10 May 2014
Posts: 141
Followers: 0

Kudos [?]: 83 [0], given: 28

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

14 Dec 2015, 13:57
Hi Chirankeev,

One more question if you don´t mind. I know I am kind of going off topic here but... you stated that "Price is directly related to demand and inversely related to supply". You used the words "directly related" and "indirectly related", meaning that even though these relationships exist, they are not actually "directly proportional" or "inversely proportional". In other words, we cannot state that "Price = k * Demand" or that "Price = k / Supply", correct?

I´ve seen in your profile that your concentration is in Economics/Finance so I thought you maybe wouldn´t mind answering this simple question.

Thank you so much!
_________________

Consider giving me Kudos if I helped, but don´t take them away if I didn´t!

What would you do if you weren´t afraid?

Intern
Joined: 09 Mar 2017
Posts: 8
Followers: 0

Kudos [?]: 0 [0], given: 16

Re: Escalating worldwide demand for corn has led to a sharp [#permalink]

### Show Tags

02 May 2017, 17:19
walker wrote:
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.

There is something that causes a short-term decrease in meat prices in spite of increase in corn prices.

Which of the following, if true, most helps to justify the observers’ 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. - irrelevant
B. Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would. - straightforward point to unambiguous short-term decrease in meat prices
C. Some people who ate meat regularly in the past are converting to diets that include little or no meat.- irrelevant. It does not explain a short-term phenomena.
D. As meat prices rise, the number of livestock producers is likely to rise again. - irrelevant. It explains a short-term increase in meat prices with following decrease.
E. Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.- irrelevant. It may vague explain a short-term increase in meat prices or a long-term decrease.

B is clear for me. Only B explains s short-term decrease unambiguously.

Can someone explain to me how B is straight forward and to the point? If anything, C would obviously mean that there would be less demand would mean that they would have to lower prices in order to make meat more attractive. I'm not sure what B is even trying to say. Should it say "Generally farmers WHO WOULD BE squeezed out of the livestock business, WILL send their.."
Re: Escalating worldwide demand for corn has led to a sharp   [#permalink] 02 May 2017, 17:19
Similar topics Replies Last post
Similar
Topics:
Worldwide demand for corn has remained flat for the past five years, a 1 13 Mar 2017, 11:21
5 Escalating worldwide demand for corn is expected to cause th 6 13 Dec 2015, 17:39
7 The increasing complexity of scientific inquiry has led to a 15 09 May 2017, 18:40
22 A shortage of orders for Manto Aircraft's airliners has led 19 14 May 2017, 08:45
7 Contrary to earlier predictions, demand for sugarcane has 15 28 Mar 2017, 05:02
Display posts from previous: Sort by