Suppose you are the manager of Big Boards, a firm that produces particle board. To make your particle board, you purchase sawdust from timber farms. During the process of harvesting timber, both lumber and sawdust are produced. If the demand for lumber decreases, this will cause the production of sawdust to ______ and the price of sawdust to _____.

Question

Quizplus · Accepted Answer

When the demand for lumber decreases, timber farms will produce less lumber, leading to a decrease in the production of sawdust, which is a byproduct. With less sawdust available, its price is likely to rise due to reduced supply.

Suppose You Are the Manager of Big Boards, a Firm