If the price of peanuts increases by 10 percent and the price of potato chips does not change, then the relative price of peanuts with respect to potato chips will ________ and the relative price of potato chips with respect to peanuts will ________.
A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall

Question

Quizplus · Accepted Answer

The relative price of peanuts with respect to potato chips will rise because peanuts have become more expensive compared to potato chips. Conversely, the relative price of potato chips with respect to peanuts will fall because potato chips are now cheaper relative to peanuts.

If the Price of Peanuts Increases by 10 Percent and the Price