Final answer:
A bushel of corn in America sells for around $7.60, guided by the principles of a perfectly competitive market. The convergence of corn and wheat prices has led to increased corn acreage. US government policies also influence corn prices and its usage across various industries.
Step-by-step explanation:
In America, the cost to produce a bushel of corn is about $3.20. According to LibreTexts™, the average price a bushel of corn sells for is approximately $7.60 per bushel. Given that markets tend to operate in a perfectly competitive environment, particularly in agriculture, a corn farmer would not sell a bushel for less, such as at $7.00, when they could sell it at the market rate of $7.60. Doing so lets them sell all they want at this higher equilibrium price.
Historically, the prices for wheat and corn have been converging, which has motivated farmers to increase the production of corn, due to its higher yield per acre and thus better business sense. This is supported by the trends where there has been a significant increase in corn acreage, underscoring the importance of converging prices in agriculture.
Furthermore, despite the US government policies that drive up the price of granulated sugar and drive down the price of corn, the abundant supply has led to corn being widely used for various purposes, including biofuels and animal feed. This oversupply can at times lead to a situation of waste but is reflective of the market dynamics in the agricultural sector.