Macroeconomics

ADM's demands are positive income elasticity, but many factors would limit the demand growth. As income changes so does the market. The market rise for ethanol and bio-fuels would generate more competition. The competition would steady the growth for production from ADM. Developing fuels requires governmental regulations, manufactures, and sales strategies. Each of these aspects of operation has the continual market pressure as well. The cost of production would increase, along with incomes of employees. The resources to produce ethanol and bio-fuels would also increase with the rise in income. Plus government would increase restrictions to regulate cost control and taxations. Overall, because of the steady growth in the use of energy from the U.S., Europe, and increase uses from Asia solidify that a 10% increase of income for customers would generate about 10% increase in demand.

The oil industry today in regard to the automotive market is inelastic in demand. The demand is the same no matter