Question

Fresh orange juice and frozen orange juice are substitutes in production. The price of fresh orange juice rises. As a result, the equilibrium price of frozen orange juice ________, and the equilibrium quantity ________.

A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases

Answer 1

Answer:

A) rises; increases

Explanation:

Substitutes goods are goods which can be used in place of one another in production or consumption.

If the price of fresh orange juice increases, producers shift to frozen orange juice and demand increases .the increase in demand leads to an increase in both equilibrium price and quantity.

I hope my answer helps you.