Question: The market for corn is perfectly competitive. A decrease in the price of wheat - a substitute for corn - occurs. We should expect that

The market for corn is perfectly competitive. A decrease in the price of wheat - a substitute for corn - occurs.

We should expect that

Demand for corn will decrease, so that at the original equilibrium price there is excess supply which will cause the price to decrease towards a new equilibrium price.

Demand for corn will decrease, so that at the original equilibrium price there is excess demand which will cause the price to increase towards a new equilibrium price.

Quantity demanded of corn will decrease, and this will cause a decrease in equilibrium price and a decrease in supply of corn.

Demand for corn will increase, so that at the original equilibrium price there is excess demand which will cause the price to increase towards a new equilibrium price.

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