A new health study reveals that consuming avocados significantly lowers cholesterol levels, while at the same time, a drought severely reduces avocado supply. How should these events be classified in terms of supply and demand analysis?

In supply and demand analysis, we look at how the availability of a product and people's desire for it affect its price and consumption. In this case, the health study shows that avocados are beneficial for lowering cholesterol, which increases people's desire to buy them, creating higher demand. At the same time, the drought reduces the number of avocados available, which decreases supply. When demand goes up and supply goes down, we expect the price of avocados to rise. For example, if more people want avocados for their health benefits but there are fewer avocados available due to the drought, the price will likely increase, making them harder to afford for some consumers.