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
I have to imagine a lot of this is that the individual item is less desired, more difficult to transport, store (not as shelf stable), and overall more difficult a product to manage.
For example your example of oranges, you can’t easily pack oranges in a space where they’re efficient in taking up space and not all squishing each other, they rot quickly in comparison to OJ, etc. Think of all the R&D that’s gone into making the end product and how fine tuned for cost efficiency and savings it is – you can’t do that with just an orange. I might be off, and I questioned myself even a little while typing this. Hopefully someone else is smarter and can explain it to us both better.
Have a good day.
Latest Answers