Assume that apples and oranges are substitute goods. A frost that destroys 50 percent of orange production in Florida would likely increase the price of oranges, therefore decreasing the
A) quantity demanded of oranges and increasing the demand curve for apples
B) demand curve for oranges and increasing the demand curve for apples
C) demand curve for oranges and increasing the supply curve of apples
D) demand curves of both oranges and apples

Question

Quizplus · Accepted Answer

When the price of oranges increases due to a reduced supply from the frost, consumers will likely buy fewer oranges (decreasing the quantity demanded of oranges) and switch to buying more apples (increasing the demand for apples), as they are substitute goods.

Assume That Apples and Oranges Are Substitute Goods