Almonds and walnuts are substitutes. Suppose the world demand for walnuts increases.
Using partial equilibrium analysis, the equilibrium price of almonds will ____ and quantity of almonds will ____.

Question

Quizplus · Accepted Answer

When the demand for walnuts increases, their price will rise. As almonds and walnuts are substitutes, consumers will switch to almonds, increasing the demand for almonds. This will lead to an increase in both the equilibrium price and quantity of almonds.

Almonds and Walnuts Are Substitutes