Question

Orange juice and cranberry juice are substitute goods. An increase in the price of orange juice results in a(n)______________. a. increase in the demand for orange juice b. increase in the supply of cranberry juice c. increase in the quantity demanded of orange juice d. increase in the demand for cranberry juice e. decrease in the quantity demanded of cranberry juice

Answer 1

Answer:

Letter d is correct. Increase in the demand for cranberry juice.

Explanation:

Substitute products are those that can be replaced by other products that are not similar but and which meet the same needs as customers may have greater benefits or a lower price offer.

This concept is presented by Porter as a model of competition analysis that influences business strategy, called Porter's 5 forces that, in addition to other variables, analyzed substitute goods and how they contribute to market division.

Therefore, in this question, when the price of orange juice increases, the demand for cranberry juice increases as it is a substitute product