For example, olive oil and olives, or orange juice and orange. Why is the extracted property of the food cheaper than the food itself?
In: Economics
You compare costs at the store for a product to get there you do not just need to produce it but alos transport it. Both olives and oranges will take up more space than the liquid you can get from them, olive oil does not need refrigeration. It is not uncommon that orange juice gets concentrated ir water is removed when it is made and then water is added when it is bottled closer to the store, which makes a huge difference in transportation costs. It can alos be frozen and stored, it can then be tawed and mixed with water and sold when oranges are not in season in one location. the cost is higher and you might need to transport them even longer
It is not just transportation, the required handling is different, you can just dump a large container into the machine that extracts the liquid and it can be bottled automatically. The fruit needs some human interaction.
It is alos not exactly the same product. Oranges you get in the store are nice looking ones but if you make juice of them you can use the ones that do not look as nice because the taste does not differ. Oranges that do not look as nice will not sell as well in a store and there is a huge risk the will get bad and need to be discarded. There is a lot of waste of produce in stores because they get damaged, get too old, etc so there are losses that result in the one that are sold costing more.
This all assumes the store charges the cost to produce, store, handle etc the product with a fixed profit. That is not what stores do, they typically price produce based on what maximizes profit. People are prepared to pay more for oranges than orange juice so they charge more for the oranges and make more profit. It is not just stores but supplies and distributors too.
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