Question

Because of unseasonably cold weather, orange crops were destroyed in Florida. This statement indicates that

a) the amount of orange juice will decrease.

b) equilibrium quantity of oranges will rise.

c) the demand for apple juice will decrease.

d) demand for oranges will necessarily rise.

Answer 1

Answer: a. the amount of orange juice will decrease

When the orange crops are destroyed in Florida, there will be less orange crops and the raw material for orange juice is orange and due to the destruction of crops, there will not be enough oranges to produce orange juice and hence, the amount of orange juice reduces. The equilibrium quantity reduces because the cost of the oranges soar up due to the less supply. Demand for orange juices will remain the same while there will not be enough supply.