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

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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

11 Answers

Anonymous 0 Comments

For produce, it’s because the nicer-looking fruits and vegetables get sold as themselves and the uglier ones get turned into juice. Or because there are some varieties that are harder to grow but look/taste better as whole fruit and there are some that grow better but are better for processing.

For other foods it’s often because the processed version is a byproduct of producing something that sells for more. So for example they’ll take a whole chicken and cut off the breasts, sell those separately, and reprocess the rest of the carcass into chicken nuggets or whatever.

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