The equilibrium price of peanut butter is $5.A study comes out that says the fat in peanut butter is good for the heart.Holding all other factors constant,which of the following scenarios could happen?

Question

Quizplus · Accepted Answer

The study that indicates the health benefits of peanut butter increases the demand for it, which would shift the demand curve to the right. This would result in an increase in both price and quantity, meaning that the new equilibrium point would have a higher price than the original $5. Therefore, the price of peanut butter would increase to $7 due to a demand shift. A supply shift would not make sense in this scenario, as the study has no impact on the supply of peanut butter. There is no evidence to suggest a decrease in the price of peanut butter either, meaning options A and C are ruled out. Option E is incorrect because it suggests both a supply and a demand shift, which is not supported by the information given.

The Equilibrium Price of Peanut Butter Is $5