Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand for jelly would decrease due to higher peanut butter prices
B
Demand for jelly would increase as consumers buy more peanut butter
C
Demand for jelly would remain unchanged regardless of peanut butter prices
D
Demand for jelly would decrease as consumers switch to substitute spreads
Understanding the Answer
Let's break down why this is correct
Answer
When the price of peanut butter goes up, people might buy less peanut butter because it costs more. Since peanut butter and jelly are complementary goods, which means they are often used together, this decrease in peanut butter purchases can lead to a decrease in jelly purchases as well. For example, if someone usually makes a peanut butter and jelly sandwich for lunch, they might decide not to buy jelly if they can't afford peanut butter anymore. Therefore, as peanut butter becomes more expensive, the demand for jelly is likely to go down too. This shows how the prices of complementary goods can directly affect each other.
Detailed Explanation
When peanut butter costs more, people might buy less of it. Other options are incorrect because This answer suggests that higher peanut butter prices would make people buy more jelly; This choice says jelly demand stays the same, no matter what.
Key Concepts
Complementary Goods
Consumer Behavior
Inferior Goods
Topic
Inferior and Complementary Goods
Difficulty
medium level question
Cognitive Level
understand
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