Question

Apple juice and orange juice are substitutes in consumption and apple juice and apple sauce are substitutes in production. If the price of orange juice ________ or the price of apple sauce ________, then the price of apple juice will __________.

• A. Increases; increases; increase
• B. Decreases; decreases; increase
• C. Decreases; increases; decrease
• D. Increases; decreases; increase

Answer 1

The correct option is A Increases; increases; increase

In case of substitutes if the price of one commodity increases the demand for the other good will increase. Because there is an increase in the demand of that other good there will occur a increase in price to bring the market to equilibrium.