The price of peanut butter falls and as a result the demand for jelly increases. We can conclude that:

Question

Quizplus · Accepted Answer

When the price of peanut butter falls, its demand decreases, since it is cheaper now, and consumers may switch to other alternatives, including jelly. Since the demand for jelly increases due to the fall in peanut butter's price, they must be complements. Complements are goods that are consumed together, so the decrease in price of one good leads to an increase in the quantity demanded for the other.

The Price of Peanut Butter Falls and as a Result