If peanut butter and jelly are complementary goods,an increase in the price of peanut butter will,ceteris paribus,
A)Increase the quantity demanded of jelly.
B)Increase the quantity demanded of peanut butter.
C)Reduce the demand for jelly.
D)increase the demand for jelly.

Question

Quizplus · Accepted Answer

Complementary goods are those that are typically consumed together, and an increase in price of one good will lead to a decrease in demand for the other good. In this case, if the price of peanut butter increases, consumers are less likely to buy it, which means they will also be less likely to buy jelly since the two products are typically consumed together. As a result, the demand for jelly will decrease.

If Peanut Butter and Jelly Are Complementary Goods,an Increase in the Price