What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly (a complementary good)fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Question

Quizplus · Accepted Answer

The increase in peanut prices and fewer firms producing peanut butter would decrease supply, raising prices. The fall in jelly prices and positive health news would increase demand, also raising prices. The net effect on quantity is ambiguous due to opposing supply and demand changes.

What Would Happen to the Equilibrium Price and Quantity of Peanut