All Grapefruit Juice Producers Have Decided to Blend Tangerine Juice

question 180

Multiple Choice

All grapefruit juice producers have decided to blend tangerine juice with the grapefruit juice. This blend results in a higher cost of production, but studies show that consumers prefer the taste of the blend to straight grapefruit juice. What will happen to the equilibrium price and quantity of the new ʺblendedʺ grapefruit juice now that it costs more to produce but consumers like it better?

• A) The price rises, but the effect on the quantity is uncertain.
• B) The price falls and the quantity increases.
• C) The price rises and the quantity increases.
• D) The effect on the price is uncertain but the quantity increases.

---

Definitions:

Cultural Adaptation

The process by which individuals or groups adjust to new cultural environments, often involving changes in practices, norms, and values.

Improvement

A positive change or enhancement in a situation or condition.

Traditional Market

A marketplace where goods are exchanged in a conventional manner, often characterized by physical stalls, personal interactions, and negotiation.

Cacao

The seed from which chocolate is made and is the product of the cacao tree, native to the Americas. It is also used in making cocoa butter and cocoa powder.