Assume peanut butter and jelly are complements.Ceteris paribus,an increase in the price of peanut butter will cause the equilibrium price of jelly to
A)Increase and the equilibrium quantity of jelly to decrease.
B)Increase and the equilibrium quantity of jelly to increase.
C)Decrease and the equilibrium quantity of jelly to decrease.
D)Decrease and the equilibrium quantity of jelly to increase.

Question

Quizplus · Accepted Answer

Since peanut butter and jelly are complements, an increase in the price of peanut butter will decrease the demand for jelly (as fewer people buy peanut butter, fewer will need jelly). This leads to a decrease in both the equilibrium price and quantity of jelly.

Assume Peanut Butter and Jelly Are Complements