Suppose you are the manager of Natural Oils, a firm that specializes in healthy skin oils. To make your oils, you purchase avocado pits from guacamole manufacturers. If the demand for guacamole decreases, this will cause the production of avocado pits to _____and the price of avocado pits to_____ .
A)decrease; fall
B)increase; fall
C)decrease; rise
D)increase; rise

Question

Quizplus · Accepted Answer

If the demand for guacamole decreases, the production of avocado pits will decrease as well because there will be less need for guacamole manufacturers to produce the pits. This decrease in production will cause the price of avocado pits to rise as the supply decreases. Therefore, the correct answer is C - decrease; rise.

Suppose You Are the Manager of Natural Oils, a Firm