Answer:
A. The demand rises while the supply falls.
Explanation:
When demand rises people want more of a product, but if the amount of that product (supply) is low it's more difficult to acquire said product, making it more expensive.
The correct answer is "decrease".
Gas (oil) is considered a necessary input in the business, as it is required for the production process. Its price would be taken into account as a production cost.
<u>One of the factors that affects the supply of a good or service is the price of the inputs used during the manufacturing process.</u> The higher the price of inputs, the higher the costs of production, and the higher the price that the firm needs to set in order to gain an acceptable profit margin per unit sold.
On the other hand, the relationship between the price of inputs and the price of the products also works in the opposite direction. If the costs of the factors of production decrease, the firm can become more competitive in the markets by establishing a lower price for the product while it can continue earning the same, or even a larger, profit margin. <u>Therefore, the price of the product will decrease if so do the prices of inputs. </u>
The factor that was not a policy of Mikhail Gorbachev was he wanted to establish an entirely free-market capitalist economy.
<h3>What did Mikhail Gorbachev do?</h3>
Mikhail Gorbachev was the last premier of the Soviet Union and leader of the Soviet Communist Party.
He tried to reform the nations so that Communism would be saved in the Soviet Union while still keeping the economy intact. He however believed that Communism was the best way and did not want a free-market capitalist economy.
Options include:
- Openness
- More freedom for Soviet citizens
- establish an entirely free-market capitalist economy
Find out more on Mikhail Gorbachev at brainly.com/question/1286817
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