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.

Corn is used as an input in livestock business. Increase in the price of corn will increase the cost of production for suppliers involved in livestock business.

This will further reduce their profit margins, consequently, these farmers are likely to leave the industry. Further reducing the supply of livestock and increasing the price of meat.

However, it is expected that the price of meat will decline in the short run. This contradiction arises because when some farmers leave the livestock business, they sell their animals earlier than usual. This would lead to excess supply, as a result, the price level will decline.