Ethanol is again viewed as one part of a solution to the problem of shortages of petroleum products. Ethanol is made from a blend of gasoline and alcohol derived from corn or sugarcane. What would you expect the impact of this program to be on the price of corn, soybeans, and wheat?
Why invest capital in purely competitive industries with equilibrium margins that are razor thin and entrants that erode quasi-profits? Suppose volume is not exceptionally large, why then?