What are two reasons the sponging industry declined?

• A. A strange fungus killed the sponge and sponge fishing became expensive
• B. Overfishing and decline in demand
• C. New synthetic sponges entered the market
• D. Government banned sponge fishing

Answer: (A)

The main idea here is that a natural-resource industry can decline when a biological threat hits the resource and, at the same time, the costs of harvesting rise. A strange fungus attacking the sponges would directly reduce the available supply, since many sponges would die or be unusable. With fewer sponges to harvest, the operation becomes less productive and less reliable. At the same time, harvesting becomes more expensive—you have to work harder to find enough sponges, process them, and bring them to market, which pushes costs up. When supply falls and costs rise, profits shrink, and producers scale back or shut down, causing the industry to decline. While other choices describe potential market shifts or regulatory actions, they don’t pair a biological blow to the resource with the resulting economic pressure in the same direct way.