3) in what ways is the market for sugar used in confectionery related to the market...

3) in what ways is the market for sugar used in confectionery related to the market for ethanol?

Expert Solution

Answer:-

So the demand for sugar for making confectionary and ethanol both decide the price of sugar. Since sugar is raw material for making ethanol, so more is the price of sugar more will be the price of ethanol. And since ethanol will be used as a fuel, its demand will be price elastic.

It has been provided that sugar production has declined in some parts of the world due to weather-related factors.

This decline in production has resulted in a decrease in the supply of sugar.

On the other hand, demand for sugar is increasing at an unprecedented rate. Much of this demand is coming from the ethanol industry that needs sugar to turn it into ethanol for fuel.

When a supply of a commodity decreases while demand for it increases than in that case price of commodity rises.

A similar thing has happened with sugar.

Decrease in the supply of sugar while increased demand for it has resulted in a recent increase in the price of sugar.

Rahul Sunny answered 2 years ago

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