In which example is an entrepreneur making a decision by understanding both demand and supply?

Correct answer: Increasing production after checking festival demand and raw material availability

Demand concerns how much customers are likely to buy, while supply concerns the availability of inputs and the ability to produce. Option B checks both increased festival demand and the availability of raw materials before increasing production. The other choices ignore one or both sides, so they may create overproduction, shortages, or unnecessary stock costs.