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Suppose that a new study is released stating that consumption of orange juice (a substitute for apple juice) reduces the risk of cancer and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice? A The price of apple juice might rise or fall and the quantity of apple juice falls. B The price of apple juice might rise or fall and the quantity of apple juice rises. C The price of apple juice falls and the quantity of apple juice falls. D The quantity of apple juice might rise or fall and the price of apple juice rises.

Answer :

Answer:

A The price of apple juice might rise or fall and the quantity of apple juice falls.

Explanation:

  • If a new study that claims that consumption of the orange juice is a substitute for the apple juice that helps to reduce the risk of the cancer and later on a major freeze event destroys the apple crop production.
  • Then only left are the orange juice which will have much higher demands as the fall in the quantity of the apples and thus in order to prevent the cancer the customers will consume more of the orange juice.

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