In general, producer's risk rises as consumer's risk falls.

Question

Quizplus · Accepted Answer

This is because when consumer's risk falls, it means that the likelihood of a product being rejected or not meeting the consumer's expectations is lower. This leads to increased demand for the product and higher sales for the producer. However, if the producer fails to deliver on quality, it can result in greater losses for them. Hence, the overall risk for the producer increases as the product's quality becomes more critical for the consumer.

In General, Producer's Risk Rises as Consumer's Risk Falls