Why are extracted properties of food often cheaper than the whole food?

Question

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

Answer 1

There are multiple reasons for this.

first of all these processed products are often made from lower grade fruits and vegetables which can be bought for lower prices.
That does however not mean that the products are worse overall, they simply buy stuff that doesnt look good enough to be sold individually.

Beside this they are also buying in bulk so its cheaper once again and last but not least many of these processed variants are shelf stable or simply last much longer overall in their processed form so they can be transported more easily.

This is also why even things like frozen veggies are often cheaper than fresh ones, they are processed and frozen in peak season when there is a lot of supply and then simply get sold over many months.