Question

People like consuming peanut butter and jelly together. The price of peanuts increases. At the same time, we see the price for Jelly rise. This would make the price for peanut butter_____________ and the quantity demanded for peanut butter ____________.

Answer 1

When the price of peanuts and jelly rise, the price for peanut butter increases and the quantity demanded decreases.

Step-by-step explanation:

When the price of peanuts and jelly both rise, it would make the price for peanut butter higher and the quantity demanded for peanut butter lower.

Answer 2

The correct answer is: increase; decrease.

Step-by-step explanation:

According to the demand theory if the price of a good increases the quantity demanded decreases. If the price of the good decreases, the quantity demanded increases. We can say then that the relationship between the price and the quantity demanded is inversely proportional.

In that case, if peanut butter and jelly are usually sold together and the price of jelly increases, so will the price of the peanut butter. Thus, the quantity demanded of both the peanut butter and jelly will decrease.