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The price of orange juice increases. Which of the following is not part of the chain of events that will follow from the price change?A.Orange juice producers will increase their production of orange juice.B.The producers of orange tree fertilizer will increase production.C.Some orange juice consumers will reduce their consumption of orange juice.D.People will buy more grapefruit juice.E.The manufactures of orange picking machines will lay-off some workers.

Question

The price of orange juice increases. Which of the following is not part of the chain of events that will follow from the price change?A.Orange juice producers will increase their production of orange juice.B.The producers of orange tree fertilizer will increase production.C.Some orange juice consumers will reduce their consumption of orange juice.D.People will buy more grapefruit juice.E.The manufactures of orange picking machines will lay-off some workers.

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Solution

The option that is not part of the chain of events that will follow from the price change of orange juice is E. "The manufactures of orange picking machines will lay-off some workers."

Here's why:

A. Orange juice producers will increase their production of orange juice. This could be a possible reaction to the price increase, as producers may want to take advantage of the higher prices and increase their profits.

B. The producers of orange tree fertilizer will increase production. This could also be a possible reaction, as an increase in orange juice production (from A) would likely lead to an increase in demand for orange tree fertilizer.

C. Some orange juice consumers will reduce their consumption of orange juice. This is a common reaction to a price increase. As the price of a good increases, consumers often reduce their consumption of that good.

D. People will buy more grapefruit juice. This could be a possible reaction if consumers see grapefruit juice as a substitute for orange juice. If the price of orange juice increases, some consumers may switch to the cheaper substitute.

E. The manufactures of orange picking machines will lay-off some workers. This is not a likely reaction to the price increase of orange juice. If anything, we would expect the opposite reaction. If orange juice producers are increasing their production (from A), they may need more orange picking machines, which would increase, not decrease, the demand for workers in this industry.

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