In 2014, the price of peanuts increased. In the market for peanut butter, this change led to ________ and which therefore ________ the price of peanut butter and ________ the quantity of peanut butter.

Question

Quizplus · Accepted Answer

The increase in the price of peanuts, a key input for peanut butter production, would lead to a decrease in the supply of peanut butter because it becomes more costly for producers to make peanut butter. This decrease in supply would, in turn, increase the price of peanut butter and decrease the quantity available in the market.

In 2014, the Price of Peanuts Increased